MW Kohl's stock tumbles on weak outlook as sales slide. Retailer is taking action, CEO says.

By James Rogers

Kohl's CEO Ashley Buchanan says that the company has 'identified key areas of focus'

Kohl's Corp. shares were down more than 18% at 10:15 a.m. Eastern time Tuesday, weighed down by the department-store chain's weak 2025 outlook after fourth-quarter sales fell 9.4% year over year.

The company's new chief executive, Ashley Buchanan, also laid out his turnaround plans for the retailer during a conference call Tuesday but said that "it will take a little bit of time to turn the ship."

The stock is on pace for its largest percentage decrease since Nov. 26, 2024, when it dropped 17.01%, and is also on pace for its lowest close since Feb. 5, 1997, when it closed at $9.97, according to Dow Jones Market Data.

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Revenue fell to $5.175 billion from $5.710 billion in the same period last year, just below the analyst estimate of $5.182 billion.

Net income for the quarter ending Feb. 1, 2025, was $48 million, or 43 cents a share, compared with $186 million, or $1.67 a share, in the prior year's quarter. Analysts surveyed by FactSet were looking for earnings of 73 cents a share. On an adjusted basis, Kohl's $(KSS)$ earned 95 cents a share.

"We have identified key areas of focus and are taking action in 2025 to reposition Kohl's for future success," Buchanan said in a statement. "Our customers expect great product, great value, and a great experience from Kohl's. I am confident that the areas we identified will deliver on what customers want and expect from Kohl's."

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Buchanan, a former CEO at Michaels Cos. and a veteran of Walmart Inc. $(WMT)$, joined Kohl's in mid-January. During Tuesday's conference call, he laid out three key areas of focus: offering a curated, more balanced assortment, re-establishing Kohl's "as a leader in quality and value" and creating a "frictionless" shopping experience in which customers have a more consistent store and digital shopping experience.

As part of Kohl's turnaround plan, Buchanan said, "We're leaning into our proprietary brands."

"This turnaround, while very achievable, is going to take some time," he said, adding that Kohl's will give details on additional initiatives later in the year.

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Comparable-store sales, or sales of stores open at least a year, declined 6.7%, slightly better than the FactSet consensus estimate of a 6.8% decline.

The CEO was asked about the macroeconomic environment during the conference call. "From a macro perspective, you see a pretty decent bifurcation among income levels. We don't see it too much geographically," he said. "When you look at income level, if you're making less than [$50,000 a year], that consumer [is] pretty constrained from a discretionary standpoint. If you're making less than [$100,000 a year] it's also pretty challenging."

He continued: "If you're in that income cohort, which we do have a decent portion of our customer base in that, it's a headwind from a macro perspective." He noted that those customers are seeking out value, saying, "That will probably expand across income cohorts over the next, probably, three to four months, I would assume."

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"That's really how we are positioning ourselves ... quality and value, which I think will resonate with our customers, particularly at this time," the CEO added.

For the full year, Kohl's expects earnings of 10 cents to 60 cents a share, a decline in net sales of 5% to 7% and a decline in comparable sales of 4% to 6%. Analysts surveyed by FactSet are looking for full-year earnings of $1.22 a share, a net-sales increase of 0.9% and a comparable-sales decline of 0.9%.

The company also cut its dividend Tuesday. Kohl's declared a quarterly cash dividend on the company's common stock of 12.5 cents per share, down from 50 cents per share.

Kohl's shares have fallen 61.5% in the last 12 months, compared with the S&P 500 index's SPX gain of 8.1%. The SPDR S&P Retail exchange-traded fund XRT is down 7.9% over the same period.

-James Rogers

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March 11, 2025 10:22 ET (14:22 GMT)

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