Kohl's has recently emerged as the latest retailer to deliver a discouraging outlook for 2025, reflecting the growing uncertainty impacting consumer behavior within the largest economy in the world. This revelation has resulted in a notable decline in their stock value, which plummeted on Tuesday. The department store chain anticipates earnings for the ongoing year to fall between $0.10 to $0.60 a share, which is considerably below the $1.09 EPS forecasted by three analysts in a FactSet survey.
For context, last year's net income stood at $0.98 per share, with an adjusted figure of $1.50. In terms of sales performance, Kohl's projects a full-year net sales decrease of 5% to 7%, following a significant 7.2% drop in fiscal 2024. Additionally, comparable sales, which experienced a decline of 6.5% last year, are predicted to fall further by 4% to 6%.
On Tuesday, Kohl's shares suffered a staggering 19% drop in regular trading, contributing to a 30% decline in its stock price for 2025. In light of these challenges, Chief Executive Ashley Buchanan expressed a commitment to reevaluating and repositioning Kohl's strategies for future success. 'We have identified key areas of focus and are taking action in 2025 to reposition Kohl's for future success,' Buchanan stated.
'I am confident that the areas we identified will deliver on what customers want and expect from Kohl's.' This grim outlook from Kohl's aligns with a broader trend, as retailers increasingly grapple with economic pressures, including tariffs, job cuts, and inflation concerns. Notably, Target has recently cautioned about 'meaningful' profit pressure expected in the first quarter, while Dicks Sporting Goods has projected slower comparable sales growth this year in light of a 'dynamic macroeconomic environment.' Furthermore, consumer confidence in the United States took a hit last month, experiencing the most significant drop since August 2021, as reported by the Conference Board. Examining the just-concluded quarter, Kohl's adjusted net income decreased to $0.95 per share, down from $1.67 a year earlier.
Nevertheless, this figure exceeded the FactSet consensus, which anticipated a lower earnings report of $0.73. Sales for the 13-week period ending on February 1 matched consensus expectations at $5.18 billion but revealed a decline from $5.71 billion recorded a year earlier. The company clarified that net sales for the previous year's quarter included approximately $164 million attributable to an additional week.
In terms of comparable sales, Kohl's reported a 6.7% drop, which closely aligns with the 6.8% decrease foreseen by four analysts. Price: 10.08, Change: -1.98, Percent Change: -16.39.