Kohl's Corporation (NYSE:KSS) shares plunged 17% after the department store group lowered its full-year outlook after softer sales in the third quarter, with CEO Tom Kingsbury's departure announced late yesterday.
Net sales in the past quarter fell 8.8% to $3.5 billion, with comparable sales down 9.3%, as softness in apparel and footwear overshadowed strong performances in Sephora, home décor, gifting, and Babies “R” Us shops.
Earnings per diluted share fell to $0.20 from $0.53 in the prior year.
“Our third quarter results did not meet our expectations as sales remained soft in our apparel and footwear businesses,” said Kingsbury, who will step down as CEO in January 2025.
“We delivered gross margin expansion and managed expenses tightly but must execute at a higher level to reverse sales declines.”
Kohl’s revised its full-year outlook to a 7-8% drop in net sales, from the 4-6% decline it had envisaged three months ago, with comparable sales down 6-7%, from 3-5% before.
Adjusted EPS between $1.20 and $1.50, reflecting underperformance in Q3 and a competitive holiday season, versus prior guidance of $1.75-2.25
As part of a leadership transition, Ashley Buchanan, current CEO of Michaels Companies, is stepping in, with Kingsbury remaining in an advisory role until May 2025.
Buchanan, who previously was Walmart's chief merchandising officer and e-Commerce COO, said, “I am thrilled to join Kohl’s, a storied and respected brand in the retail industry.”
Chairman Micahel Bender said: “His vast retail experience leading operations, merchandising, and e-commerce at Walmart and his past five years as CEO of Michaels will bring a steady, proven, innovative leader to Kohl's as we continue to transform the business and drive future growth."