(Bloomberg) -- Kohl’s Corp. slumped in early U.S. trading after lowering its annual outlook and reporting first-quarter same-store sales that were way below analysts’ estimates. The surprising setback signals that the retailer needs to do more than rely on its partnership with Amazon.com Inc. to draw in more customers.
Comparable store sales, a closely watched metric for retailers, declined 3.4% last quarter, while analysts projected a drop of 0.1%, according to Consensus Metrix. Earnings will be $5.15 to $5.45 a share this year, excluding some items, the retailer said, down from a range of $5.80 to $6.15 a share expected in March. The shares plummeted 11% before the markets opened Tuesday.
Kohl’s results contrasted with those from Macy’s, which reported improvements to its sales last week. “The year has started off slower than we’d like, with our first-quarter sales coming in below our expectation,” Kohl’s Chief Executive Officer Michelle Gass said in a statement. The company is “planning the year more conservatively.”Kohl’s quarterly earnings missed Wall Street projections for the first time since the fiscal third quarter of 2018, which ended in October 2017.The outlook for consumer-facing companies in the U.S. has also become more uncertain. Although Kohl’s makes no mention of the trade war with China in its statement, the company, like Macy’s, could suffer as the Trump administration proposes new 25% tariffs on about $300 billion of goods from China, including apparel. There’s one potential bright spot: Kohl’s is ramping up its tie-up with e-commerce giant Amazon, and as of July will accept Amazon returns at all of its stores. The idea is customers will browse and buy something while making their returns.
The shares were down 11% $55.80 in early trading. That level is the lowest for the stock since January 2018.
For more on the results, click here. For company statement, click here.
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