Kohl’s shares tumbled 24% on Tuesday after the retailer slashed its dividend and projected a steeper-than-anticipated sales decline for fiscal 2025, deepening investor concerns.
The department store chain, now led by newly appointed CEO Ashley Buchanan, is the latest to signal weakening consumer spending as economic uncertainty looms. Even before the latest drop, Kohl’s stock had already fallen 14% year-to-date.
For the fiscal year ahead, Kohl’s anticipates a 5% to 7% decline in total sales and a 4% to 6% drop in comparable sales, which account for store openings and closures. The company expects earnings per share between $0.10 and $0.60—far below analyst expectations. FactSet analysts had projected a much smaller sales decline of under 1% and earnings of at least $1 per share.
Kohl’s had already been grappling with declining foot traffic, exacerbated by a weak back-to-school season that led to downwardly revised guidance ahead of the holiday shopping period. Buchanan, who took the reins in January, faces the challenge of revitalizing the company’s core customer base.
As part of its cost-cutting measures, Kohl’s announced a sharp reduction in its quarterly dividend, lowering it to 12.5 cents per share from 50 cents, effective for the next payout on April 2.
In its most recent quarter, which ended Feb. 1, Kohl’s reported a net profit of $48 million, or 43 cents per share—down sharply from $186 million, or $1.67 per share, in the same period a year earlier. Excluding one-time items, adjusted earnings came in at 95 cents per share, surpassing analysts’ expectations of 73 cents.
Revenue for the quarter dropped 9.4% to $5.18 billion, aligning with Wall Street estimates. Comparable sales saw a 6.5% decline.
Looking ahead, Kohl’s plans to regain momentum in key product categories like fine jewelry and intimate apparel while continuing to expand its Sephora shop-in-shop initiative. The retailer also aims to broaden the range of brands eligible for its coupons and enhance store layouts to improve customer experience.
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