What: Shares of retailer Kohl's (NYSE:KSS) declined by 16.8% in August, according to S&P Capital IQ data, driven by a second-quarter earnings report that missed analyst expectations. Quarterly revenue of $4.27 billion was $40 million shy of the average analyst estimate, while adjusted EPS of $1.07 came up short by $0.09.  

So what: While Kohl's produced positive comparable-store sales growth of 0.1% during the second quarter, marking the third quarter in a row of positive comps, this growth was slower than expected. CEO Kevin Mansell blamed a shift in sales from July to August related to sales tax holidays in certain states for the lower-than-expected results.

Kohl's took a $131 million charge related to debt extinguishment during the second quarter, which dragged down GAAP earnings. On an adjusted basis, Kohl's net income declined by 9% year-over-year, with a slight dip in the gross margin and higher operating costs as a percentage of revenue driving the decline.

Along with missing estimates across the board, Kohl's gave an update on its guidance for the full year. The company now expects its earnings to come in at the low end of its previously guided range of $4.40 to $4.60 per share.

Now what: Kohl's returned to comparable-store sales growth during the 2014 holiday season, and the company has managed to maintain positive comps through the second quarter. But earnings are currently being pressured, and the only remedy is likely growing comparable-store sales at a faster rate.

A growth rate of 0.1%, while certainly better than a decline, is nothing to get excited about. During the second quarter of 2014, Kohl's comparable-store sales slumped by 1.3%, so Kohl's performance has certainly improved. But investors are clearly disappointed that sales growth is coming in below expectations.

Ultimately, the back-to-school and holiday shopping seasons are very important to Kohl's, and we'll have to wait for the company's third- and fourth-quarter results to determine if Kohl's turnaround can be sustained. For now, investors are concerned about Kohl's slow growth and disappointing profitability, and the stock got hammered in August as a result.