Kohl’s (NYSE:KSS) saw its stock tumble more than 24% intra-day today after issuing a weaker-than-expected profit outlook for the year, overshadowing its fourth-quarter earnings beat.
For the fourth quarter, Kohl’s reported adjusted diluted earnings per share (EPS) of $0.95, surpassing analyst expectations of $0.73. Revenue came in at $5.18 billion, aligning with consensus estimates. Gross margin also improved slightly, rising to 32.9% from 32.4% a year earlier, beating the expected 32.7%.
Despite these positive metrics, operating income fell short, coming in at $126 million compared to the projected $185.8 million. The major setback came from Kohl’s forward guidance, which significantly underwhelmed investors. The company projected diluted EPS for the year between $0.10 and $0.60, well below the $1.32 analysts had expected. Additionally, Kohl’s forecasts net sales to decline between 5% and 7%, with comparable sales expected to fall 4% to 6%, much worse than the anticipated 0.9% drop.
While Kohl’s delivered an earnings beat for the quarter, the weak full-year forecast highlighted ongoing challenges in consumer demand and sales trends, leading to a sharp sell-off in the stock.