Kohl’s shares fell more than 20% as the retailer reported declining sales and its chief executive abruptly stepped down — just days before the start of the crucial Black Friday holiday season.
The Menomonee Falls, Wisconsin-based department-store chain reported a 9.3% decline in same-store sales on Tuesday — its eleventh consecutive quarter of same-store sales decline.
The retailer also lowered its annual forecast for the third consecutive quarter. Kohl’s now expects full-year net sales to decline between 7% to 8%, compared to a previous forecast that had projected a decline of between 4% to 6%.
On Monday, Kohl’s announced CEO Tom Kingsbury will step down after less than two years in the role — a sudden departure less than a week before a major sales holiday that will likely further weaken investor confidence.
The company hired Michaels CEO and former Walmart executive Ashley Buchanan to take over the role in January.
Evercore ISI analyst Michael Binetti said, “Although we heard from several retailers last week about bullish quarter-to-date results, we do not think the sudden departure of the CEO the night before earnings and four days before Black Friday The first is a strong signal of confidence.”
The announcement, which came a day before the company’s earnings report, “casts a meaningful shadow” on Kohl’s, Binetti said.
Under Kingsbury, Kohl’s focused on its home furnishing, gift, and children’s clothing categories as cash-strapped customers avoided purchasing expensive clothing and shoes at department stores.
Customer visits to Kohl’s declined an average of 6.2% in the third quarter, compared with a 3% decline in the previous three months, according to Placer.ai data.
As the holiday season rapidly approaches, investors worry that inflation-stricken consumers hungry for deals may prefer discount chains like Walmart over traditional department stores like Kohl’s and Macy’s, which have It has struggled to retain customers amid rising prices.
Kohl’s shares have fallen 47.9% so far this year, while Macy’s shares have fallen 18.7% over the same period.
On Monday, Kohl’s rival Macy’s delayed its earnings release after a The rogue employee hid up to $154 million. In expenses.
The retailer released preliminary third-quarter results that showed a 2.4% decline in sales to $4.7 billion and a 1.3% decline in same-store sales.
with post wires
