What happened
Shares of Kohl's (KSS 3.37%) were sliding today after the department-store chain turned in an underwhelming holiday sales report and tamped down full-year profit expectations. As a result, the stock was down 8.9% as of 12:17 p.m. EST.
So what
Comparable sales at the retailer dipped 0.2% in November and December, compared to expectations of 0.4% growth for the full fourth quarter, which includes January. Though Kohl's outperformed department-store peers like Macy's and J.C. Penney, the numbers were disappointing, especially since the company had expanded its Amazon returns program to stores nationwide this summer, which was expected to lift traffic during the key holiday season.
Image source: Kohl's.
Kohl's also said that adjusted earnings per share would come in at the low end of its previous range of $4.75 to $4.95. CEO Michelle Gass noted challenges in women's apparel in the period, saying: "We continue to see momentum in key areas including our digital business, active, beauty and children's, and solid performance in footwear and men's. This was offset by softness in women's, which we are working with speed to address."
Now what
Fiscal 2019 has been a year of disappointments for Kohl's; the stock is down 35% over the last year, and full-year EPS is now expected to decline 15% from a year ago. Its forecast of $4.75 in adjusted EPS is considerably worse than its initial guidance of $5.80 to $6.15, made last March. That's a sign of poor execution and unexpected challenges during the year.
Investors will learn more when Kohl's delivers its full fourth-quarter earnings report on March 3 and when it holds an investor day conference on March 16. Still, it's clear for now that the company has work to do.
