Kohl's Corporation (NYSE:KSS) faced a larger-than-expected drop in quarterly sales as American shoppers cut back on their spending amid persistently high inflation.
The retail chain posted a 5.5% decline in comparable sales for the third quarter, compared to analysts' estimates of a 3% fall, according to data from the London Stock Exchange Group.
Despite these challenges, Kohl's reported a significant reduction in inventories, marking the third consecutive quarter of decline, down by 13%. This move aligns with the company's strategy to streamline its inventory and focus on products in demand as the holiday season approaches.
In a positive turn, Kohl's raised the lower end of its annual profit forecast. The company now anticipates per-share earnings in the range of $2.30 to $2.70, up from the previous forecast of $2.10 to $2.70.
“I am pleased with our store performance driven by strong growth in Sephora and the newness in our home and gifting initiatives,” CEO Tom Kingsbury said in a statement. “This reinforces our actions are working and resonating with our customers.”
However, prior to the earnings release, Kohl's said it had parted ways with president and COO Dave Alves, who departed the company after approximately seven months in those roles. The announcement, made on November 17, via a filing with the Securities and Exchange Commission (SEC), provided no specific details about the departure.
Alves was appointed to the roles in February and officially assumed them in April 2023.
Alves left the company to pursue other opportunities, a Kohl’s representative told Retail Dive on Monday.
Shares of Kohl’s were down 4.9% in premarket trading Tuesday.