Kohl’s posted an earnings and revenue beat for the fourth quarter on Tuesday, but its stock plunged as it issued much worse-than-expected guidance for the year ahead.
Shares of the company fell more than 15% in early trading on Tuesday.
For 2025, Kohl’s expects revenue to fall 5% to 7%, compared with Wall Street estimates of a 1.6% decrease, according to LSEG. The company projected comparable sales will fall 4% to 6%, while analysts anticipated a 0.9% decrease, according to StreetAccount. Kohl’s expects earnings per share to come in between 10 cents and 60 cents, a miss compared to a midpoint Wall Street estimate of $1.23, according to LSEG.
On a Tuesday earnings call, CEO Ashley Buchanan said the company has fallen short in recent years by focusing too much on new categories and deemphasizing core products such as fine jewelry, petite clothing and proprietary brands.
“A lot of the issues were probably self-inflicted over many years of decisions,” Buchanan said. “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.”
Buchanan, who stepped in as CEO of the company in January, said Kohl’s has also excluded too many brands from its coupons, with those exclusions peaking in 2024. That change frustrated and confused customers, he added, and is in the process of being partially reversed.
Here’s how the retailer did compared with what Wall Street was expecting, based on a survey of analysts by LSEG:
- Earnings per share: 95 cents adjusted vs. 73 cents expected
- Revenue: $5.18 billion vs. $5.15 billion expected
Kohl’s has navigated significant turmoil in the last few months. The retailer in November named Buchanan its new CEO as of Jan. 15, replacing Tom Kingsbury after he spent two years leading Kohl’s.
Shares of the company have fallen over 50% in the past year.
In January, the company announced that it had cut nearly 10% of its corporate workforce and would close 27 underperforming stores by April.
Overall most Kohl’s stores are “incredibly healthy” and profitable, CFO Jill Timm said on the earnings call, but the company has many store leases coming up for renewal in the next few years that are an opportunity for reevaluation.
As with other retailers, Kohl’s lower-income customers are prioritizing value amid elevated inflation, Buchanan said.
Kohl’s became the latest retailer to say it expected a turbulent 2025, following Dick’s Sporting Goods earlier Tuesday. Falling consumer confidence, President Donald Trump’s tariff policy and weaker-than-expected job growth have all raised fears about a potential recession.
Kohl’s fourth-quarter net sales of $5.18 billion fell from $5.71 billion during the same period in 2023. Full-year 2024 sales came in at $15.39 billion, down from $16.59 billion in 2023. Both the fourth quarter and full year of fiscal 2023 were one week longer than their 2024 counterparts, which the company said added $164 million in net sales to 2023.
Quarterly comparable sales, defined by Kohl’s as sales from e-commerce and stores open for at least 12 months, fell 6.7% year over year. Wall Street expected a 6.8% decrease, according to StreetAccount.
Kohl’s reported a net income for the fourth quarter of $48 million, or 43 cents per share, compared with a net income of $186 million, or $1.67 per share, during the fourth quarter of 2023.
Adjusting for costs associated with impairments and store closures, Kohl’s reported fourth-quarter earnings of 95 cents per share.
Timm said Tuesday that while store sales were strong, digital sales underperformed, especially in the legacy home category.
Comparable beauty sales increased 13%, Timm said, with the retailer’s Sephora partnership continuing to drive revenue in the business.
