Kohl’s (NYSE: KSS) has once again cut its financial forecast for the year, blaming increasing inflation for its decline in sales of apparel, shoes, and other items. The company revealed that customers had been frequenting stores less, spending less money, and opting for its more cost-effective brands. Shares fell 10% during premarket trading following the news.
The department store chain reported second-quarter earnings of USD1.11 per share, compared to the expected USD1.03 a share. Revenue amounted to USD4.09 Billion, higher than analysts anticipated USD3.85 Billion.
“The year has started out below our expectations. Following a strong start to the quarter with positive low-single digits comps through late March, sales considerably weakened in April as we encountered macro headwinds related to lapping last year’s stimulus and an inflationary consumer environment. We remain committed to our long-term strategy and are encouraged that our updated store experience, with Sephora at Kohl’s shops, delivered positive comparable store sales across these 200 locations for the quarter. We continue to expect our business to improve as the year progresses, with growth in the second half as we benefit from the rollout of 400 additional Sephora stores, enhanced loyalty rewards, and further investment in our stores,” said Michelle Gass, Kohl’s chief executive officer.
Nevertheless, same-store sales for locations open year-round, fell 7.7%. According to the retailer, its home goods division and children’s apparel underperformed. Furthermore, it experienced a downtrend in its juniors division for younger women.
Kohl’s shares have tumbled approximately 31% throughout the year and have a current market cap of USD4.19 Billion.