May 28 (Reuters) – Kohl’s stuck to its annual targets after posting a smaller-than-expected loss on Thursday, amid signs that the department store chain’s turnaround efforts under new CEO Michael Bender have started to pay off.
The company’s shares, which have declined about 37% so far this year, jumped 17% in premarket trading. The stock briefly doubled in value last year following a meme-stock-like rally.
Kohl’s named Bender permanent CEO in November to lead a turnaround after years of sliding sales and shrinking profit, with the retailer losing ground to Amazon and off-price competitors.
The company has lost about 80% of its value in the past five years amid a series of challenges, including strategic missteps, mounting supply chain issues and uneven demand for discretionary items in a worsening macroeconomic environment.
Bender earlier this year said he planned to cut unproductive styles and focus more on basics. Simultaneously, Kohl’s has been reviving categories like jewelry and accessories and expanding its Sephora partnership to win back loyal shoppers and attract younger customers.
The push comes as U.S. consumer sentiment fell to a record low in May and inflation posted its biggest gain in three years. Still, higher-income households continue to spend, as reflected in recent retail earnings from Abercrombie and Ralph Lauren, with steady sales underscoring resilience.
Big-box retailers such as Walmart and Target have also signaled weakening consumer health hit by rising fuel costs.
Kohl’s said it continues to expect annual net sales to remain flat or decline up to 2%. It also sees annual earnings per share in the range of $1.00 to $1.60.
The company posted a 1.7% decline of net sales to $3 billion for the quarter ended May 2 — in line with estimates, according to data compiled by LSEG.
Kohl’s reported a loss of 13 cents per share, the same as a year ago. Analysts had expected a loss of 19 cents per share.
(Reporting by Sanskriti Shekhar in Bengaluru; Editing by Joyjeet Das)
Comments