Kohl’s stock drop due to underwhelming earnings and CEO departure: Can the company remain competitive?
Kohl’s is facing some tough times ahead, as evidenced by their recent Q3 earnings report. The department store chain reported a 9.3% decline in same-store sales, marking the 11th consecutive quarter of decline. To add to the mix, CEO Tom Kingsbury will be stepping down from his role, though he will stay on as an advisor until his retirement in May 2025. Ashley Buchanan, current CEO of Michaels, will take over as CEO of Kohl’s on Jan. 15, 2025.
The numbers from the Q3 earnings report were disappointing across the board. Net revenue fell 9% year-over-year to $3.51 billion, with a profit of $22 million, or 20 cents per share. This fell short of analyst estimates of $3.85 billion in revenue and $29.8 million in profit, or 27 cents per share. Additionally, the company revised its full-year net sales outlook downward from a previous decline of 4-6% to a bleaker 7-8%, and adjusted its earnings per share expectations from $1.75-2.25 to $1.20-1.50.
With Macy’s also struggling and reporting a downturn in sales, the question on everyone’s mind is whether Kohl’s can stage a comeback after such a lengthy decline. Investors seem skeptical, with the stock dropping 17% after the earnings report. Kingsbury mentioned efforts to reposition the company to face modern challenges, but results have not materialized as hoped.
Looking ahead, incoming CEO Ashley Buchanan highlighted a few key areas for potential improvement, such as focusing on digital and social media marketing, leveraging the loyalty of new Kohl’s Rewards members, and enhancing partnerships with brands like Sephora and Babies”R”Us. Whether these strategies will be enough to reverse Kohl’s fortunes remains to be seen. The competition in the retail sector is fierce, with giants like Amazon and Walmart continuing to expand their market share and innovate rapidly. It’s a tough road ahead for Kohl’s, but with the right leadership and strategic moves, there is hope for a turnaround.
