Kohl’s Says Sales Decline Easing After Back-to-School Hit
Kohl’s Quarterly Results Show Sales Slump Persists in Tough 2020
(Bloomberg) -- Kohl’s Corp. reported third-quarter sales that fell short of analysts’ expectations, but said the holidays may bring some much-needed relief.
Chief Executive Officer Michelle Gass said on a conference call Tuesday that sales have rebounded in September and October after the pandemic eroded back-to-school sales. Executives said they’re optimistic the trend will continue through the vital holiday shopping season.
Kohl’s shares rose as much as 6.1% to $27.70 in New York trading, erasing an earlier decline. The stock has fallen 49% this year through Monday’s close.
Management plans to sell more “active and casual” clothes like gym clothes and loungewear, and increase the segment from to more than 30% of the business, up from 20%, to capitalize on apparel trends during the Covid-19 pandemic. Kohl’s will start selling its own activewear brand, called Flex, in March.
Home goods also showed some promise for Kohl’s, with sales for the category rising 10%. Shoppers are clamoring for kitchen items such as cookware and small electric appliances as they stay home and make their own meals during the pandemic.
Kohl’s revenue declined 13% in the third quarter from a year earlier, easing from the 22.9% drop in the previous period. The Menomonee Falls, Wisconsin-based company said it plans to reinstate a dividend during the first half of 2021.
Same-store sales, a critical gauge of the sector’s performance, fell 13.3% in the quarter ended Oct. 31, slightly worse than the estimate for a decline of 12.3% from Consensus Metrix.
Kohl’s won’t provide its usual holiday sales update this year, citing lingering uncertainty tied to Covid-19. Instead, executives will wait until the fourth-quarter call in early March.
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