Kohl’s had an even worse quarter than Wall Street expected with net sales plummeting nearly 10% in the aftermath of layoffs and store closures
Even the sometimes
tongue-in-cheek popularity
of Kohl’s Cash hasn’t helped the department store chain the past year. Kohl’s reported disappointing earnings Tuesday that were lower than Wall Street’s expectations.
Kohl’s
reported
a 9.4% drop in fourth-quarter net sales, cut its dividend, and changed its guidance for a 5%-to-7% sales decline in 2025.
Analysts polled
by market analysis firm FactSet had projected a comparable sales decline of less than 1% for the year and had anticipated earnings per share would be at least $1, but Kohl’s reported just $0.43 earnings per share.
In premarket trading, Kohl’s shares fell a whopping 17% to $10 on earnings news. As of Tuesday afternoon, shares were hovering around $9.22, a near 24% drop for the day.
The lackluster results come at the heels of a tumultuous year for the retailer. In late January, the company held
corporate layoffs
just weeks after announcing store closures for
27 locations
. Jen Johnson, SVP of corporate communications at Kohl’s, previously told
Fortune
these decisions were taken “very seriously” and were done to “support our commitments to increase efficiencies and improve profitability in the business for the long-term benefit of our associates and customers.”
Kohl’s declined to provide further comment to
Fortune
about the company’s most recent earnings report and whether the layoffs and store closures had an impact on their fourth-quarter earnings.
Neri Karra Sillaman
, a fashion retail and strategy expert with the
University of Oxford’s Saïd Business School
, said she thinks Kohl’s “real issue” is a “lack of identity and muddled strategy of the company.” Other department store chains including J.C. Penney’s have had an
uphill battle remaining relevant
in today’s retail environment.
“They are caught between two worlds—trying to appeal to value-conscious shoppers while also maintaining a department store feel,” Sillaman told
Fortune
. “That’s a tough place to be right now.”
Outlook for Kohl’s in 2025
Consumers have been
cutting back on buying non-essentials
in an inflationary environment, but when they do spend, they’re looking for
low prices at places like Walmart
or a “very unique experience,” Sillaman explained. And Kohl’s isn’t offering enough of either, she argued.
Kohl’s CEO Ashley Buchanan recognized this downfall during the company’s fourth-quarter earnings call Tuesday.
“Over the past few years, we have implemented a significant amount of change across our assortment, value strategies, and store experience in an effort to attract new customers,” said Buchanan, who was just
installed as Kohl’s CEO in January
. “While the intention of this strategy to engage a new customer has been important, it has also caused friction with our core customer.”
But according to
Kohl’s 2025 outlook
, the company is committed to complete its rollout of its
Sephora
partnership, enhance its online-shopping experience, and improve in-store shopping by adding more impulse queuing fixtures—i.e. shelves right at cash registers with enticing products.
“Our goal is to offer quality products at great prices across our entire brand portfolio so our customers can more clearly see the value they’re getting with their purchase,” Buchanan said during the earnings call.
Sillman said focusing on what makes Kohl’s unique should be the company’s top priority for 2025. Kohl’s should also “define what they stand for: Is it a destination for affordable, stylish fashion? A home goods leader? Right now, all of this is very unclear,” Sillaman said.
“The challenge is not just foot traffic—it’s getting customers to feel like Kohl’s is a place worth returning to, not just a stop along the way.”
