It’s a tough time out there for the retail industry. Amid economic uncertainty and changes in consumer behavior, even some of the most prominent players are feeling the pinch. While some are shutting down entirely, others are trying to reposition themselves and keep customers coming through the door. The latest example is Kohl’s, where shoppers are still abandoning the retailer.
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Kohl’s just posted a shaky outlook for the coming year.
On March 11, Kohl’s released its fourth-quarter earnings that showed the company was backsliding. The retailer said its sales had slipped from $5.71 billion to $5.18 billion compared to the same period the previous year, clarifying that the quarter was a week longer in 2023, CNBC reports. Overall, the company also saw its sales for 2024 decrease from $16.59 billion in 2023 to $15.89 billion last year.
However, there may be more difficult days to come in the year ahead. The company said it expected its overall revenue to fall anywhere between 5 and 7 percent, which beat out the analysts’ estimates of a 1.6 percent drop, per CNBC. The retailer specified that comparable sales would likely drop 4 to 6 percent, again beating out experts’ estimations of a 0.9 percent drop.
The company’s announcement sent Kohl’s stock price shares tumbling, dropping 24 percent yesterday following the news. This brings the total share price loss to just under two-thirds of what it was a year ago.
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Company leadership says it’s working to win back customers.
The latest news comes after a tumultuous and trying period for the big-name retailer. Most recently, the store saw its previous chief executive, Tom Kingsbury, announce his resignation just four days before Black Friday, ending his contract months earlier than planned.
The departure came in the wake of major changes to stores, including scaling back on its petite apparel business and pushing out its popular jewelry sections to make room for a new in-store partnership with makeup retailer Sephora. In a recent interview, current Kohl’s CEO Ashley Buchanan admitted the decisions may have alienated some customers.
"A lot of the issues were probably self-inflicted over many years of decisions," he told CNBC. "We have a very loyal customer. When I toured stores, all I heard was how much they love Kohl’s. And what I realized is we’re kind of making it hard for them to love us."
Kohl's is planning some changes.
Despite the hardship, Kohl’s isn’t taking the latest news lying down. The store said it was planning to continue expanding its partnership with Sephora while refocusing on jewelry sales and intimate apparel, The Wall Street Journal reports. Leadership says it's also planning a reorganization of its store layouts and including more brands in coupons and discounts.
Part of the new focus might be a worthwhile effort. According to Kohl’s CFO Jill Timm, comparable beauty cosmetic sales saw a 13 percent increase; she called stores "incredibly healthy" during the earnings report, providing a bit of a bright spot in the announcement.
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It will also be closing more than two dozen locations by April.
However, the retailer will still reduce its footprint due to its dismal numbers. Earlier this year, the company announced it would shutter 27 "underperforming" locations by the end of next month.
"While Kohl’s continues to believe in the health and strength of its profitable store base, these specific locations were underperforming stores," the company said in a press release.
In total, stores will shutter in 15 states. California will lose the most out of the bunch, with a total of 10 closures.
The company also recently downsized its workforce, laying off 10 percent of its corporate office earlier this year, CNBC reports.
