Kohl's stock drops sharply as it swings to an unexpected loss and issues 2024 profit warning

By Steve Gelsi

Retailer cites lower comparable store sales, as stock sinks 23%

Kohl's Corp.'s stock on Thursday lost about a quarter of its value in what could be its largest-ever one-day drop after it swung to an unexpected first-quarter loss and warned its full-year 2024 earnings would fall short of analyst estimates.

Kohl's (KSS) stock fell 23% in afternoon trading, reaching $20.98 - its lowest level since 2020. If the losses hold through the trading session, Kohl's stock decline will surpass the 20.4% drop on March 16, 2020, according to FactSet data.

Menomonee Falls, Wisc.-based Kohl's reported a first-quarter loss of $27 million, or 24 cents a share. In the year-ago quarter, it earned $14 million, or 13 cents a share.

The company's results in the latest quarter missed the FactSet consensus estimate for a profit of 5 cents a share.

First-quarter revenue fell 5.3% to $3.2 billion, short of the analyst estimate of $3.4 billion.

The retailer also forecast full-year profit of $1.25 to $1.85 a share, below the FactSet consensus estimate of $2.40 a share.

Kohl's said the results did not meet its expectations.

Lower clearance sales versus last year caused a roughly 6% drag on comparable store sales, the company said.

On the plus side, Kohl's said its gross margins grew by about 0.5%, as its inventory fell and it "tightly" controlled expenses.

"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 [makeup line] Sephora," the company said.

Prior to Thursday's moves, Kohl's stock was down 5% so far in 2024, compared to a 10.4% rise by the S&P 500 SPX.

Kohl's publicly-traded corporate debt also fell in price on Thursday, as sellers outpaced buyers.

-Steve Gelsi

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05-30-24 1311ET

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