By Senad Karaahmetovic
Kohl's (NYSE:KSS) shares are trading 7.2% lower in pre-market Wednesday after the company reported weaker-than-expected Q4 results and offered a soft full-year outlook.
Kohl's reported adjusted loss per share of 2.49 while analysts were looking for a profit per share of $0.97. Revenue fell 7.2% year-over-year to $5.78 billion, again missing the $5.99B consensus.
Comparable sales were down 6.6%, a worse-than-expected decline compared to the 4.7% expected contraction. On a more positive note, inventories fell to $3.19B from $4.88B in the prior quarter.
"Kohl's fourth quarter results reflect meaningful proactive measures we took to better position the business for 2023, as well as sales pressure driven by the ongoing persistent inflationary environment," Tom Kingsbury, Kohl's chief executive officer, stated.
"We are refining our strategy and re-establishing merchandise disciplines with a customer-centric focus across the organization."
On the guidance front, the company expects full-year sales to decline 2-4% while adjusted EPS is seen at $2.40 (up or down 30 cents), missing the $3.20 consensus.
Vital Knowledge analysts believe investors won't be as positive on Kohl's as for Target (NYSE:TGT) yesterday despite falling inventories.
"The inventory cut here is bullish, but there are too many secular questions hanging over the company (without a substantial food business to anchor traffic like WMT and TGT, it's not clear how a big box retailer selling generic soft/hard goods can thrive)," the analysts wrote.