Kohl’s, the household United States department store, has recorded a slump in shares due to a poor earnings report.
The chain’s First Quarter Fiscal 2024 Financial Results, announced with little fanfare, have surprised Wall Street with their underwhelming performance.
Shares in Kohls seen shares hit by as much as 25% after the earnings report and call was publicized.
Kohl’s reports lower-than-expected financials
The U.S. company has been a feature in the shopping lives of millions of Americans for decades, but 2024 has been a challenging year for the chain.
Net sales decreased 5.3%, and comparable sales decreased 4.4%, a hammer blow for a company looking to prosper back to pre-pandemic levels.
Operating income was $43 million, compared to $98 million in the prior year. As a percentage of total revenue, operating income was 1.3%, a decrease of 148 basis points year over year.
“Our first quarter results did not meet our expectations and are not reflective of the direction we are heading with our strategic initiatives. Regular price sales increased year-over-year, with early success in underpenetrated categories, positive trends in our Women’s business, and continued strong growth in Sephora,” said Tom Kingsbury, Kohl’s chief executive officer.
U.S. employment figures are up, and inflation has taken its best turn in three years, but American households face issues with spending.
Consumer caution
The Consumer Price Index, as we reported, has reflected these challenging times for United States families.
Dana M. Peterson, Chief Economist at The Conference Board, said of the dip, “Confidence retreated further in April, reaching its lowest level since July 2022 as consumers became less positive about the current labor market situation and more concerned about future business conditions, job availability, and income.”
Kohl’s isn’t the only U.S. chain facing a brutal 2024; as we reported, several food chains and grocery store staples have faced challenges.
McDonald’s CEO had to publicly lambast criticism of the menu and fake price hikes that damaged the company’s image.
Red Lobster also announced that it would be facing financial difficulties and would need to sell to investors to keep the brand afloat.
It is a turbulent time for businesses in the United States, but there is hope, as a stable labor market and a growing housing market can attest.
Kohl’s has to hope that this can lift their financial reporting for the next quarter or face the same challenges that are hampering icons of the American retail and restaurant industry.
Image: Kohl’s.
