Kohl's (KSS) Tumbles on Soft Results and Slashed Guidance

August 18, 2022 8:57 AM EDT
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Shares of Kohl’s (NYSE: KSS) are down almost 9% following a guide down as red-hot inflation is hurting consumer spending habits.

KSS reported an in-line adjusted EPS of $1.11 while revenue came in at $3.86 billion, lower than the consensus of $3.92 billion. Comparable sales were reported at -7.7%, worse than the estimate of -7.42%.

“A weakening macro environment, high inflation and dampened consumer spending are having broad implications across much of retail, especially in discretionary categories like apparel. Given our penetration in these discretionary categories, this is disproportionately impacting Kohl’s,” the company said in a client note.

Kohl’s added that a middle-income customer has become more cost-conscious and is feeling greater pressure on their budget.

“We are seeing customers make fewer shopping trips, spend less per transaction, and shift towards our value-oriented private brands.”

On a full-year basis, Kohl’s cut its EPS forecast to $2.80 to $3.20 from the prior $6.45 - $6.85. Analysts were looking for a guide down to $4.17, which was the median estimate. Net sales are seen dropping between 5% and 6%, a cut from the prior outlook that called for growth of 0%-1%.

By Senad Karaahmetovic

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Senad Karaahmetovic