Kohl’s Corp. pulled its outlook for the year and reported sharp declines in third-quarter sales and profits, as the company heads into the crucial holiday season looking for a new chief executive officer to replace the outgoing Michelle Gass.
The retailer, whose customer has been hit hard by ultra high inflation, said its third-quarter net income fell by 60 percent to $97 million, or 82 cents a diluted share, down from $243 million, or $1.65, a year ago.
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Kohl’s gave investors a sense of the quarter to investors earlier this month, when Gass’ departure to Levi Strauss & Co. was revealed.
EPS came in as the company projected, but analysts had been bracing themselves for even steeper declines and had 78 cents penciled in — 4 cents worse than the final result.
Revenue for the three months ended Oct. 29 decreased 7 percent to $4.3 billion from $4.6 billion.
In August, Kohl’s updated its annual outlook, noting that sales would decline by 5 to 6 percent with adjusted EPS of $2.80 to $3.20, but that target has been taken off the table.
“Given the recent volatility in business trends, the significant macroeconomic headwinds, along with the unexpected CEO transition, the company will not be providing guidance for the fourth quarter, and therefore is withdrawing its prior full year 2022 guidance,” the firm said.
Former Burlington CEO Tom Kingsbury has taken charge as interim CEO.
Peter Boneparth, independent board chair, said: “The Kohl’s board is focused on supporting the management team during this CEO transition period, as well as the board’s search committee in its pursuit of finding the next CEO to lead Kohl’s. We look forward to partnering with Interim CEO Tom Kingsbury and the entire leadership team to execute at the highest level this holiday season, while also capitalizing on opportunities to strengthen the business.
“Kohl’s is a great company with extremely bright prospects and I am confident we will find the right candidate to successfully position Kohl’s to drive sales, grow earnings and create shareholder value,” Boneparth said.