Kohl's Shares Tumble, But Analyst Sees Promise In New CEO's Strategy

Shares of Kohl's Corp KSS tanked on Thursday after the company announced plans to close stores.

A meeting with the company's new CEO Ashley Buchanan highlighted management's turnaround plan that will be put in place this year, according to Telsey Advisory Group.

The Kohl's Analyst: Analyst Dana Telsey maintained a Market Perform rating and price target of $10.

The Kohl's Thesis: The company's new CEO "brings relevant retail experience" from his tenure with Blackstone Inc's BX Michaels Companies and Walmart Inc WMT, Telsey said in the note.

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Mr. Buchanan played a key role in improving profitability, growing digital sales and simplifying the merchandising strategy at Michaels Companies, she added.

For Kohl's, the CEO identified six initiatives that would be implemented this year that are expected to deliver results over the next 18 months, the analyst stated.

"New merchandising strategy focuses on offering a more balanced, curated assortment that addresses the needs of all customers, both new and existing," she wrote.

Kohl's pricing strategy focuses on driving value through increased promotions, while "reducing the complexity of its offers," Telsey said.

"We were encouraged by management’s grasp of the challenges it faces and the strategies it has laid out thus far to address them," she wrote.

KSS Price Action: Shares of Kohl's had declined by 25.41% to $6.42 at the time of publication on Thursday.

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