Kohl’s stock (KSS) plunged by almost 26 percent after it released its first-quarter report. This is the most significant decline in its stock value in a single day. The department store chain reported a massive miss in earnings compared with Wall Street expectations. The company also lowered its guidance for the year. CWEB analyzes that Kohl’s is facing a more severe slowdown in discretionary spending than others.
Kohl’s reported a 24-cent loss per share, while analysts polled by LSEG had expected the company to post a small profit. The market was surprised that Kohl’s posted a loss per share, as analysts were not expecting a loss. The reported revenue for the fiscal first quarter was lower at $3.18 billion, while analysts predicted $3.34 billion.
The company reported a net loss of $27 million, while a year ago, it had reported a profit of $14 million, which was an earnings of 13 cents per share. Although the company was expected to post a profit of 4 cents, as per LSEG data, it posted a loss of 24 cents, which was one of the factors in its stock plummeting.
Net sales also fell by 5.3 percent compared to the same quarter in 2023, with comparable sales declining by 4.4 percent.
Kohl’s lowered its guidance for the year and said that 2024 net sales are expected to decline from 2 percent to 4 percent, while LSEG analysts expected a 0.2 percent gain. The department store expects full-year diluted earnings per share between $1.25 and $1.85, while LSEG predicted earnings of $2.34 per share.
In a press release, Kohl’s said there is “uncertainty in the consumer environment” and more. CWEB analyzes that companies like Dick’s Sporting Goods and brands such as Abercrombie & Fitch have seen their shares rise as they have transformed their strategy despite a weak economy, where discretionary spending has generally declined across retail. CWEB analysts believe Kohl’s stock rating to be Hold or Sell.
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