(Bloomberg) -- Kohl’s Corp. fell the most in almost three years after posting quarterly sales that trailed analysts’ projections. The retailer also cut its full-year profit forecast for a second time this year, exacerbating concerns about department stores.
Same-store sales, a key metric for retailers, increased 0.4% in the third quarter, compared with the 0.8% growth seen by analysts, according to Consensus Metrix. Kohl’s now says profit excluding some items will be $4.75 to $4.95 -- with the new high point of the range 50 cents below the previous outlook. See more results here.
While Chief Executive Officer Michelle Gass said the retailer was entering the crucial holiday period with “momentum” and is “strategically increasing” investment to boost growth and traffic, the results fueled investor concern. She said on a call after the earnings release that Kohl’s is increasing its focus to attract millennial shoppers. Kohl’s has been trying to set itself apart from the department-store segment, which has struggled to adapt to broad changes in consumer habits, by using partnerships and smaller-store formats. The results suggest the company needs to do more, however.The chain is banking on its alliance with Amazon.com Inc., which lets customers return Amazon purchases at the more than 1,000 Kohl’s locations. Gass said on the call that executives are confident the partnership “will have a positive contribution to operating income in 2019.” Kohl’s goal: To get customers making returns to browse aisles and buy something.
Kohl’s shares fell as much as 18% in New York, the biggest intraday tumble since January 2017. The shares had already dropped 12% this year through Monday’s close, compared with the 25% gain in the S&P 500 Index. Other department-store chains, including Macy’s Inc. and Nordstrom Inc., also declined.For the company statement, click here.
(Adds CEO’s comments from earnings call throughout.)
To contact the reporter on this story: Jordyn Holman in New York at email@example.com
To contact the editors responsible for this story: Anne Riley Moffat at firstname.lastname@example.org, Jonathan Roeder, Lisa Wolfson
For more articles like this, please visit us at bloomberg.com
©2019 Bloomberg L.P.