Kohl’s shares sink after big holiday-quarter losses

Kohl’s shares sunk on Wednesday after the retailer posted a big loss and a sales decline of about 7% in the holiday quarter.

Here’s how the retailer did for the quarter that ended Jan. 28 compared with what Wall Street was anticipating, based on a survey of analysts by Refinitiv:

• Loss per share: $2.49 vs. expected earnings of 98 cents a share
• Revenue: $5.78 billion vs. $5.99 billion

Kohl’s also shared a weak outlook for the year ahead. It said it anticipates net sales to range between a decline of 2% and a decline of 4%, including the impact of the 53rd week of the year that is worth about 1% year over year. It said it expects diluted earnings per share to range from $2.10 to $2.70, excluding non-recurring charges.

Tom Kingsbury, the company’s newly named CEO, attributed the retailer’s disappointing results to “the ongoing persistent inflationary environment.”

Yet he said the company is taking steps to “better position the business for 2023.”

“I am confident that our efforts will drive improved, and more consistent, sales and earnings performance over the long-term,” he said in a news release.

Kohl’s has dealt with activist pressure, leadership changes and a more challenging economic backdrop.

Then-CEO Michelle Gass announced in November that she was leaving to become president and CEO-in-training at Levi Strauss & Co. Her departure came after Ancora Holdings and Macellum Advisors questioned Kohl’s turnaround strategy, pushed for improvement to its sales trends and called for new leadership.

Pressure from those investors gained momentum after Kohl’s ended talks this summer to sell to the Franchise Group, owner of The Vitamin Shoppe.

Kohl’s announced last month that Kingsbury, who served as interim CEO, would step into the position permanently. He is the former CEO of Burlington Stores. It said at the time that it had reached a cooperative agreement with Macellum Advisors, as it named Kingsbury to the role.

Kohl’s had declined to provide a holiday-quarter outlook and pulled its full-year guidance in November, saying inflation had hurt consumer spending and made future sales patterns hard to predict.

As of Tuesday’s close, Kohl’s stock is up about 11% this year, outperforming the approximately 3% gain of the S&P 500. Shares closed at $28.04, bringing the company’s market value to nearly $3.1 billion.

This story is developing. Please check back for updates.