Kohl’s Earnings Look Good but Sales Are a Different Story. The Stock Is Falling.

Net sales of $3.84 billion missed analysts’ estimate of $3.99 billion, and same-store sales fell 5.5% from a year earlier, worse than the expected 3.8% decline.

“Our strategies to reposition Kohl’s for improved sales and earnings performance remain in the early stages,” said CEO Tom Kingsbury in the earnings release.

The company narrowed its full-year 2023 earnings guidance to a range of $2.30 to $2.70 a share, compared to a prior estimate for earnings between $2.10 and $2.70. Net sales are now expected to decline 2.8% to 4%, compared to an earlier forecast for a 2% to 4% drop.

CFRA Research analyst Zachary Warring was feeling tentatively optimistic on the heels of the earnings report.

“We continue to like the company’s partnership with Sephora, positioning in Home, Athleisure wear, and Gifting, and smaller store size than peers,” Warring wrote in a note on Tuesday. “We believe the worst is behind Kohl’s and see little downside to the shares.”

“However, we need to see improvement to the balance sheet before we can get more excited about the shares,” the analyst continued. He rates shares at Hold with a $28 price target.

Kohl’s stock was down 13% to $21.73 on Tuesday, putting it on track for its largest percent decrease since July 1, 2022, when it dropped 20%, according to Dow Jones Market Data.

Write to Emily Dattilo at [email protected]