Kohl’s shares plunge 22% on weak sales forecast, new CEO warns turnaround will take ‘some time’

Kohl’s on Tuesday forecast weaker-than-expected sales and its new chief executive warned that a turnaround will take “some time” – sending its shares toppling 22%.

The stock drop put the flailing retailer on track for its lowest close since the mid-1990s as investors panicked that the department chain could be hit doubly hard by a slowdown in spending amid heightened trade tensions.

Kohl’s said it expects sales to drop between 5% to 7% in 2025, and 4% to 6% on a comparable basis, which adjusts for store openings and closures.

The retailer forecast earnings between 10 and 60 cents a share for 2025.

Analysts polled by FactSet had predicted a sales decline of less than 1%, and forecast the retailer’s earnings would at least reach $1 a share.

Ashley Buchanan, Kohl’s new chief executive, did little to ease investor fears during an earnings call when she said that a turnaround will still take “some time.”

The company is looking to add new and affordable products to its shelves this year, she said.

Buchanan is also hoping to regain demand that Kohl’s lost in its fine jewelry category after shrinking store selections to make way for Sephora shops – in other words, reverse the damage done by her predecessors. Kohl’s will still continue to implement Sephora shops in stores this year, she said. 

But Tuesday’s disappointing forecast follows months of sluggish sales, so the game plan is unlikely to ease investor fears.

Kohl’s reported plummeting sales in its crucial back-to-school season last year, and then saw its chief executive abruptly quit after a two-year stint just days before the Black Friday kickoff to holiday shopping.

Buchanan, a former Michaels and Walmart executive, stepped into the role in January amid meager results.

That same month, she led a round of layoffs and reduced Kohl’s corporate workforce by 10%.

Kohl’s on Tuesday said it is continuing the cost-cutting campaign by slashing its quarterly dividend to 12.5 cents a share, down from 50 cents a share, for the next payout on April 2. 

In the quarter ended Feb. 1, Kohl’s reported a profit of $48 million, or 43 cents a share – a far cry from the $186 million, or $1.67 a share, from the same period last year.

Sales fell 9.4% to $5.18 billion, falling in line with analysts’ estimates. Comparable sales dropped 6.5%.

Kohl’s reported adjusted earnings per share of 95 cents, above analysts’ expectations of 73 cents a share.