Kohl collapses after an unexpected loss, guidance reduced

Kohl’s Corp. Stock (KSS) fell on Thursday after the retailer reported a surprise first-quarter net loss and lowered its full-year guidance.

Revenue fell 5% year-over-year to $3.38 billion, missing analyst expectations of $3.54 billion. Kohl’s said regular-price sales rose 2.4% year-over-year, but were offset by a large drop in sales that represented a hit of more than 600 basis points to comparable sales, which fell 4.4%.

While analyst estimates compiled by Visible Alpha only expected Kohl’s to post a modest profit of $2.41 million, or 2 cents per share, the retailer reported a net loss of $27 million, or 24 cents per share. In the first quarter of 2023, Kohl’s earned $14 million, or 13 cents per share.

Kohl’s first-quarter results “did not meet our expectations and do not reflect the direction we are taking with our strategic initiatives,” said Chief Executive Officer (CEO) Tom Kingsbury.

Earlier this month, the retailer declared a quarterly dividend of 50 cents per share, marking the tenth consecutive quarter at that level.

Kohl lowers guidance amid ‘continued uncertainty’

Kohl’s also lowered its full-year outlook as Kingsbury said the company preferred to keep its outlook conservative given “continued uncertainty in the consumer environment.”

Kohl’s now projects net sales for the fiscal year to decline 2% to 4%, down from its last earnings report, which projected a decline of 1% to an increase of 1%.

In addition to lower sales, Kohl’s also forecast lower profits this year, with EPS ranging from $1.25 to $1.85, compared with the $2.10 to $2.70 range it achieved last quarter. The new range is also lower than analysts’ forecast of $2.10 per share for this year.

Kohl’s shares fell 27% as of 10 a.m. ET on Thursday to $19.92, their lowest level since October.