Kohl's plummets after slashing its profit forecast for the 2nd time this year

Jennifer Graylock/Getty Images
  • Kohl’s stock tanked as much as 13% in early trading on Tuesday after the missing third-quarter expectations and cutting its full-year earnings forecast for the second time in 2019.
  • The company’s adjusted earnings per share, total sales, and comparable sales growth fell below Wall Street’s estimates.
  • The retail chain will bolster investment to take advantage of the holiday season sales boom, CEO Michelle Gass said in the Tuesday report.
  • Watch Kohl’s trade live here.

Kohl’s shares plunged as much as 13% in early Tuesday trading after the retail chain missed third-quarter estimates and lowered its expectations for full-year earnings.

The company’s quarterly revenue and profit figures fell below analyst expectations. Kohl’s also issued its second guidance cut of the year, moving its full-year profit forecast even lower from its initial estimate.

It will be crucially important for the retailer to take advantage of the consumer-spending boost that normally accompanies the holiday season. CEO Michelle Gass assured investors the company is taking steps to benefit from the year-end sales boom.

“We enter the holiday period with momentum and are strategically increasing our investments to take advantage of the unique opportunity to fuel growth and customer acquisition,” Gass said in a statement on Tuesday.

Here are the key numbers:

Adjusted earnings per share: $US0.74, versus the $US0.86 estimate

Revenue: $US4.36 billion, versus the $US4.40 billion estimate

Comparable sales growth: 0.4%, versus the 0.8% estimate

Full-year EPS guidance: $US4.75 to $US4.95, versus the $US5.19 estimate

Kohl’s first lowered its 2019 guidance in May after posting disappointing first-quarter figures. The chain forecasted adjusted earnings at between $US5.15 to $US5.45 per share, lower than its previous guidance of $US5.80 to $US6.15.

The chain’s comparable sales growth fell well under its year-ago performance. Same-store sales grew 2.5% in the third quarter of 2018. The continued lag through 2019 points to a potential strategy blunder, as Gass’ plan to use smaller stores and partnerships fails to pull the company from a steady decline.

The CEO focused on the positive comparable sales figure, highlighting a return to store growth despite the year-over-year tumble.

“We are pleased to report that our business returned to growth during the third quarter, with a comparable sales increase of 0.4%,” Gass said in the quarterly report. “We believe that investing in the short-term will support our strategies to drive profitable growth over the long-term.”

Kohl’s closed Monday at $US58.40 per share, down about 12% year-to-date.

The company has nine “buy” ratings, eight “hold” ratings, and two “sell” ratings from analysts, with a consensus price target of $US57.53, according to Bloomberg data.


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