Kohl’s slashed its expectations for the year after sales slumped in the second quarter, sending shares down 9% at the opening bell Thursday and closing out a mixed week for retailers.
The company that owns Coach and Kate Spade also issued an sales outlook for the year that fell a bit short of Wall Street expectations, sending its shares lower on a day when broader markets bounced higher.
Kohl's has struggled for years and spiking inflation on top of rapidly evolving patterns of consumer spending have exacerbated its problems.
Sales at Kohl’s fell to $4.09 billion in the second quarter compared with the $4.45 billion during the same stretch last year.
Sales at stores open at least a year, a key gauge of a retailer’s health, slumped 7.7%.
The company, based in Menomonee Falls, Wisconsin, cut its profit outlook in half, from between $6.45 to $6.85 per share, to between $2.80 and $3.20.
That is well short of Wall Street's per share projections of $4.04.
Americans pulling back on spending for non-essential items as prices soar and they're also spending their money elsewhere as the waning pandemic allows more freedom of movement. Last month, Kohl's ended exclusive talks with Franchise Group, the owner of Vitamin Shop and other retail outlets, for a buyout deal potentially worth about $8 billion.
At Tapestry, the luxury goods retailer that owns Coach and Kate Spade, quarterly sales were essentially flat at $1.6 billion, but rose 15% to $6.7 billion for its full fiscal year.
The company anticipates 2023 revenue of about $6.9 billion on earnings in a range of $3.80 to $3.90 per share. Wall Street is calling for $6.88 billion in revenue with earnings of $3.87 per share.
Shares of Tapestry slipped about 1%.
On Wednesday the Commerce Department reported that retail sales were flat last month after having risen 0.8% in June. Sales were down 0.5% at department stores and 0.6% at clothing stores.
“Second quarter results were impacted by a weakening macro environment, high inflation and dampened consumer spending, which especially pressured our middle-income customers," Kohl's CEO Michelle Gass said.