Kohl's Stock Dives as Retailer Cuts Guidance Ahead of Holiday Season

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true status modified wordcount 465 wordcount|465 Photograph by Justin Sullivan/Getty Images Kohl’s Stock Dives as Retailer Cuts Guidance Ahead of Holiday Season Kohl’s Stock Dives as Retailer Cuts Guidance Ahead of Holiday Season Kohl’s Earnings: Stock Dives as Retailer Cuts Guidance Ahead of Holiday Season

Shares in Kohl’s plunged more than 12% in premarket trading as the department store chain cut its full-year profit forecast ahead of the crucial holiday season.

Kohl’s Stock Dives as Retailer Cuts Guidance Ahead of Holiday Season

Shares in Kohl’s plunged more than 12% in premarket trading as the department store chain cut its full-year profit forecast ahead of the crucial holiday season.

https://www.barrons.com/articles/kohls-stock-earnings-miss-expectations-department-store-retailer-51558449861 https://www.barrons.com/articles/beleagured-retailer-macys-needs-a-holiday-miracle-51573871839 https://www.barrons.com/articles/kohls-defies-department-store-woes-but-stock-falls-on-sales-miss-51566309177 https://www.marketwatch.com/story/kohls-stock-drops-10-after-it-cuts-guidance-2019-11-19 Kohl’s Stock Dives as Retailer Cuts Guidance Ahead of Holiday Season By Callum Keown Photograph by Justin Sullivan/Getty Images

Shares in Kohl’s plunged more than 12% in premarket trading as the department store chain cut its full-year profit forecast ahead of the crucial holiday season.

Revenue beat expectations but same-store sales, which rose 0.4%, missed analysts’ forecasts.

The back story. Kohl’s stock has fallen 12% for the year to date—as of Monday’s close—outperforming U.S. department store peers Macy’s—down 43%- and Nordstrom, which has dropped 19%.

The rise of e-commerce companies has hurt bricks-and-mortar retailers in recent years but Kohl’s has taken steps to mitigate the damage.

Earlier this year it expanded a partnership with Amazon.com to allow online shoppers to return items at more than 1,150 stores across 48 U.S. states. Amazon products are also available in 200 Kohl’s stores.

Kohl’s missed sales forecasts in the second quarter as net sales fell 3.3% to $4.17 billion but earnings beat expectations. Chief Executive Michelle Gass said same-store sales had turned positive in the final six weeks of the quarter and that upcoming brand launches and its Amazon returns program would positively impact the remainder of the year.

What’s new. Kohl’s cut its full-year earnings guidance in its third-quarter results on Tuesday.

Same-store sales rose 0.4% in the third quarter, below FactSet estimates of 0.9% growth, while total revenue fell 0.1% to $4.625 billion. Net income fell 24% to $123 million, below estimates of $135 million.

Gass said the quarter started off well in a successful back-to-school season and ended strongly in October.

The retailer said it now expected adjusted earnings per share of $4.75 to $4.95, down from previous guidance of $5.15 to $5.45—the FactSet consensus had been $5.19.

Looking ahead. Gass said Kohl’s is entering the all-important holiday season with momentum, but that is not how investors see things after a disappointing third quarter.

She added the company was increasing its investments to drive profitable growth in the long term. While the Amazon partnerships seem shrewd, it relies on customers returning items at Kohl’s being tempted by the department store’s products, which is not a guarantee. These unspecified investments will have to do much more to fight off the retail gloom.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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