Kohl's Plummets After Slow Sales Squeeze Profit Last Quarterby
Kohl’s Corp. suffered its biggest stock decline in more than two decades after slow fourth-quarter sales weighed on earnings, renewing concerns that the department-store industry is mired in a slump.
Same-store sales -- a key benchmark for retailers -- rose just 0.4 percent in the period, Kohl’s said in a preliminary earnings report Thursday. That missed the 0.8 percent projected by Retail Metrics. The company now expects annual profit of $3.95 to $4 a share, excluding some items, far short of the $4.30 estimated by analysts.
Though Kohl’s sales were strong between Thanksgiving and Christmas, they were slow in early November and January, Chief Executive Officer Kevin Mansell said in the statement. A warm season crimped demand for winter clothes, he said, echoing a common complaint among retailers. Accessories sales also slumped as shoppers preferred to spend their money on home goods and footwear.
“Sales were very volatile,” Mansell said.
The stock fell 19 percent to $41.52 in New York after the report was released, marking the worst single-day plunge since Kohl’s initial public offering in 1992. The rout followed a 22 percent decline in 2015.
Kohl’s had to rely on markdowns to move merchandise last quarter, further squeezing profit. The Menomonee Falls, Wisconsin-based company will report its full results on Feb. 25.