Kohl’s topped Q4 Wall Street expectations, but comparable sales and earnings slid in the period as what it calls its “legacy” home products business softened while its recently reinvigorated home decor business strengthened.
Net income was $48 million, or 43 cents per diluted share, the company stated, versus $186 million, or $1.67 per diluted share, in the year-prior period.
Adjusted for one-time events, net income was $106 million, or 95 cents per diluted share. Kohl’s did not include an adjusted net income figure in the year-earlier period results.
Kohl’s topped a Zacks Investment Research analyst consensus estimate of 72 cents per adjusted diluted share and a revenue estimate of $5.35 billion.
Comparable sales decreased 6.7%. Net sales were $5.18 billion and total revenue was $5.4 billion versus $5.71 billion and $5.96 billion, respectively, in the year-before quarter. Operating income was $126 million versus $299 million in the year-previous period.
For the full fiscal year, net income was $109 million, or 98 cents per diluted share, the company reported, versus $317 million, or $2.85 per diluted share, in the prior annum. Adjusted net income was $167 million, or $1.50 per diluted share. Kohl’s did not include an adjusted net income figure in the year-earlier results.
Net sales were $15.39 billion and total revenue was $16.22 billion versus $16.59 billion and $17.48 billion, respectively, in the year before. Operating income was $433 billion versus $717 billion in the year previous.
Ashley Buchanan, Kohl’s recently appointed CEO, said in a conference call the company has taken several steps to turn its results around. He said the retailer has begun to establish a curated, more balanced assortment that better fulfills customer needs, including paying more attention to core customer favorites such as jewelry.
“As we are working through our merchandise strategies, our goal is to drive improved assortment clarity across all categories with a purpose behind each brand and each product,” Buchanan said. “Recently, our focus has been heavily weighted on new products to attract new customers, and we have deemphasized the products and categories that our core customers love.”
Buchanan said the company also is determined to reestablish Kohl’s as a value and quality leader by offering great product at great price and enhancing promotions to drive more value.
“We will start by rebalancing our assortment to match customer needs by elevating our focus on our proprietary brands,” he said. “These brands provide quality, value and an exclusive reason to shop at Kohl’s.”
At the same time, the company wants to better align the online and in-store shopping.
In doing so, Buchanan said, Kohl’s is “enhancing our omnichannel platform to deliver a frictionless experience to our customers. We want our customers to have a consistent experience across all channels, restoring trip assurance for key items, increasing inspiration in store and online, and providing more consistent store and digital experience so our customers can easily shop Kohl’s at any store or online on any platform. We can improve the customer experience from more consistent in-stocks for high volume items, particularly in our basic and essentials.”
Buchanan added Kohl’s will continue to prioritize key growth categories that are resonating with customers, including home decor Sephora and impulse, having built solid momentum in those categories in 2024 and seeing growth potential in each.
Jill Time, Kohl’s CFO, added the company continues to enjoy collective outperformance in key growth categories including home decor, impulse, gifting and baby gear. Outperformance in those categories was not enough to offset soft sales in the legacy home business, which was challenging in the fourth quarter, Kohl’s reported. Poor demand in legacy home impacted digital sales, as the product segment over-penetrates in Kohl’s online operation, the company indicated.
In announcing the financial results, Buchanan said, “Kohl’s is built on a strong foundation that includes operating more than 1,100 conveniently located stores nationwide, serving over 60 million customers, with 30 million of those customers being Kohl’s loyalty members. Kohl’s has a tremendous opportunity to build on our strengths, address key areas of opportunity and better serve our customers every day. We have identified key areas of focus and are taking action in 2025 to reposition Kohl’s for future success. Our customers expect great product, great value and a great experience from Kohl’s. I am confident that the areas we identified will deliver on what customers want and expect from Kohl’s.”
