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

Kohl’s ( KSS ) shares tumbled 17% in premarket trading Tuesday after the retailer posted weaker-than-expected quarterly earnings and lowered its outlook.

The poor results and outlook come a day after the department store company said 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 position 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 a profit of $22 million, or 20 cents a share. stock. Analysts polled by Visible Alpha expected revenue of $3.85 billion with net income of $29.8 million, or 27 cents per share.

Kohl’s lowered its outlook for full-year net sales, now predicting they will fall 7% to 8%, down from its previous projection of a 4% to 6% decline. It 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 as an advisor until May

Kingsbury will remain in an advisory role to Buchanan, who previously held senior positions at Walmart ( WMT ) and its Sam’s Club division, Kohl’s said.

Kingsbury, who became interim CEO at the end of 2022 and previously ran Burlington Stores ( BURL ), will remain in the advisory role until he retires next May, Kohl’s said.

“Under his leadership, the company is undergoing a transformation to elevate its product portfolio, enhance the in-store experience and improve its long-term financial health and profitability,” said Chairman Michael Bender.

Bender said Buchanan improved Michael’s “profitability and cash flow while increasing operational efficiency across the company,” and also increased the craft store’s e-commerce business.

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