As investors geared up to trade stocks Friday morning, it seemed as if Kohl's (KSS 9.72%) stock might continue to be shunned. After all, in the preceding days, its price had tumbled by nearly 22% week to date, according to data compiled by S&P Global Market Intelligence.
That wasn't overly surprising since the company announced the departure of a top executive, and an analyst published a critical research note on its business.
Abrupt departure
Kohl's April Fool's Day disclosure was no joke. It divulged in a regulatory filing that its chief technology and digital officer, Siobhán McFeeney, was to depart the company the following day. In the tersely worded document, the retailer did not say who would assume McFeeney's duties, or whether it was actively and formally searching for a replacement.
Shopping for clothes.
With the retail sector being as eternally competitive as it is, a solid digital operation is crucial. Online is a key sales outlet for nearly every type of company in the industry, so a sudden departure of an executive at the top of this effort is concerning.
Compounding that, on Thursday, UBS analyst Jay Sole published a new note on Kohl's. In the take, Sole reiterated his sell recommendation on the stock and his $5 price target.
NYSE: KSS
Key Data Points
Brick-and-mortar blues
According to reports, the pundit believes that Kohl's is having difficulty being competitive in the market in several aspects of its business, including price, products, and service. He wrote that while management is operating with an encouraging level of urgency, its strategy won't reverse all of those negative developments.
I would generally agree with this view. In many ways, Kohl's operates like an old-fashioned brick-and-mortar retailer that isn't rising to the challenges of the new era. I would be very cautious at best with this stock.
