Kohl’s Stock Falls After Weak Results, CEO Departure News

Shares of Kohl’s (KSS) plunged 17% in premarket trading on Tuesday after the retailer reported weaker-than-expected quarterly results and lowered its outlook.

The poor results and outlook come a day after the department store company announced that Chief Executive Officer (CEO) Tom Kingsbury is stepping down after less than two years at the helm of the struggling retailer. Kingsbury, who was named CEO in February 2023, will leave his post on January 15 and be replaced by Ashley Buchanan, CEO of The Michaels Companies.

Kohl’s reported third-quarter net sales fell 9% year over year to $3.51 billion, with profit of $22 million, or 20 cents per share. Analysts polled by Visible Alpha expected revenue of $3.85 billion and net income of $29.8 million, or 27 cents per share.

Kohl’s lowered its full-year net sales forecast, now forecasting a 7% to 8% decline, compared to previously forecasting a 4% to 6% decline. The company also lowered its 2024 earnings per share (EPS) estimate to $1.20 to $1.50 from $1.75 to $2.25.

Outgoing CEO Kingsbury will remain in office as an advisor until May

Kingsbury will continue to advise Buchanan, who previously held senior positions at Walmart (WMT) and its Sam’s Club division, Kohl’s said.

Kingsbury, who became interim CEO in late 2022 and previously led Burlington Stores (BURL), will remain in an advisory role until his retirement in May next year, Kohl’s said.

“Under his leadership, the company is undergoing transformation to expand its product portfolio, enhance the store experience and improve its long-term financial health and profitability,” said Chief Executive Officer Michael Bender.

Bender said Buchanan “improved Michaels’ profitability and cash flow while increasing operational efficiencies across the company” and also expanded the arts and crafts store’s e-commerce business.

UPDATE – This article has been updated with Kohl’s third quarter results and the latest stock price information