The other shoe has dropped after Kohl's (KSS 0.43%) disappointing holiday season. Comparable-store sales fell by 0.2% during November and December which caused the company to revise its fiscal 2019 earnings guidance to the lower end of its previously announced guidance of $4.75 to $4.95.
Now, the chain has decided to lay off 250 employees including a layer of regional management, USA Today reported. The moves are part of a broader attempt by Kohl's to simplify its management structure.
Kohl's is cutting 250 corporate workers. Image source: Kohl's.
These are corporate cuts
No stores will be closing and no store-level employees will be impacted. The cuts impact corporate employees split between the company's Menomonee Falls, Wisconsin headquarters as well as other regional management offices.
"The departures include removing a layer of regional store leadership roles and positions, restructuring teams in our merchant organization and changes to other positions in our corporate offices," Kohls' Senior Vice President of Communications Jen Johnson said in a statement.
It's a tweak, not a disaster
Investors should take note that Kohl's will still meet its 2019 guidance. The holiday numbers were disappointing but they weren't disastrous. A slight drop in same-store sales does not equal a need for a complete reboot. Instead, Kohl's needs to continue to tweak its merchandise and business model.
"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," said CEO Michelle Gass in a press release.
These layoffs are part of addressing areas of weakness. They are unfortunate for those impacted, but not a cause to doubt the company's long-term prospects.
