Kohl's Amidst Inflation And Transition: An Analyst's Perspective On Declining Sales And Revenue

  • Telsey Advisory Group analyst Dana Telsey reiterated a Market Perform rating on the shares of Kohl's Corporation KSSlowering the price target to $24 from $30.
  • Kohl's will report 1Q23 results on May 24 before the bell.
  • The analyst flags product cost inflation to remain a headwind through the first half of FY23, with the first quarter bearing the brunt of it.
  • The analyst remains particularly cautious about the unfavorable macro environment and strategic transitions, which cloud the visibility of nearer-term trends of the company.
  • These apart, management expects the promotional environment to remain competitive and wage inflation to be a potential headwind. 
  • In 1Q23, the analyst forecasts a net sales decline of 5% Y/Y to $3.30 billion and a total revenue decrease of 4.9% to $3.54 billion.
  • In the quarter-to-be-reported, the analyst sees a 150 bps gross margin contraction to 36.8% vs. the consensus for 36.5%.
  •  Taken together, the analyst forecasts an operating margin of 0.2% in the quarter, down 200 bps from. 2.2% last year.
  • Price Action: KSS shares are trading higher by 0.81% to $20.55 on the last check Thursday.
  • Photo Via Company
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