Kohl’s (KSS) shares tank over 26% as unexpected Q1 loss disappoints markets

on May 30, 2024
  • Kohl's stock drops over 21% in premarket trading after surprising Q1 loss.
  • Adjusted earnings show a significant downturn from last year's profits.
  • Company revises annual earnings projection well below market expectations.

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Kohl’s Corporation (NYSE: KSS) experienced a significant drop in its stock value on Thursday, tumbling more than 26% following the release of its first-quarter earnings.

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The company reported an unexpected loss of $0.24 per share, sharply contrasting with the expected earnings of $0.04 per share and last year’s profit of $0.13 per share.

This represents a dramatic earnings surprise of -700% compared to the anticipated figures.

Kohl’s adjusts outlook for fiscal year

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Amidst these challenging results, Kohl’s also adjusted its outlook for the fiscal year, now projecting earnings to be between $1.25 and $1.85 per share.

This adjustment is significantly lower than the previous consensus of $2.40 per share.

The lowered expectations reflect the company’s current struggles and a cautious approach to the unpredictable retail environment.

Kohl’s revenues under pressure

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For the quarter ended April 2024, Kohl’s posted revenues of $3.38 billion, failing to meet the Zacks Consensus Estimate by 4.47%.

This figure is also a decline from the $3.57 billion reported in the same period last year, marking a consistent challenge in hitting revenue targets over the past four quarters.

The disappointing earnings report not only impacted Kohl’s but also influenced other players in the retail sector, with department stores like Nordstrom and Macy’s experiencing declines in their stock values as well.

Investors react, KSS stock tanks

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The broader industry impact and investor reactions to Kohl’s performance are mixed.

While the immediate stock price movement reflects negative sentiment, the longer-term outlook by investors will likely hinge on the effectiveness of Kohl’s strategic initiatives aimed at reversing the current downturn.

Analysts and investors will be closely monitoring the management’s commentary and strategic plans outlined in the earnings call to gauge the potential for recovery and growth.

What lies ahead for Kohl’s?

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As Kohl’s navigates through these turbulent times, the key question remains: what is next for the company?

The future trajectory of Kohl’s stock and its market position will largely depend on its ability to adapt to changing market dynamics and to successfully implement strategies that will mitigate current losses and leverage potential market opportunities.

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