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Why Kohl's Corporation Stock Is Down 19% So Far in 2017

By Joe Tenebruso – Jul 26, 2017 at 9:00AM

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Multiple signs point toward further losses for the struggling retailer.

What happened

Shares of Kohl's (KSS -0.85%) have fallen 19.1% since the beginning of the year, according to data from S&P Global Market Intelligence.

The beleaguered retailer is facing an onslaught of competition and changing consumer habits, both of which suggest more trouble may lie ahead.

A road sign saying "Challenges Ahead"

Image source: Getty Images.

So what 

Kohl's started out 2017 on a sour note, falling 19% after reporting downbeat holiday sales. The department chain's comparable sales dropped 2.1% in November and December, which -- when combined with store closings -- led overall sales to fall 2.7%. In turn, Kohl's slashed its full-year adjusted EPS guidance to $3.60-$3.65, from a range of $3.80-$4.00.

After partially rebounding in February, Kohl's stock resumed its downward slide in March. And after another short-lived rally in April, the swoon recommenced in May, after the retailer reported another quarter of declining comps and revenue.

Now what 

Kohl's, like other department-store chains, finds itself on the wrong side of several powerful forces: the relentless growth of e-commerce, falling mall traffic, and Amazon's aggressive entry into apparel sales.

Unfortunately for Kohl's and its brethren, all three of these trends are likely to continue to pressure department stores' sales and profits for the foreseeable future. That makes it possible -- perhaps even likely -- that the 19% decline so far in 2017 may only be a prelude to further losses in the months ahead.

Joe Tenebruso has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Amazon. The Motley Fool has a disclosure policy.

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