Kohl's Shares Are Sliding During Thursday's Pre-Market: Here's Why

Shares of Kohl’s Corporation KSS are sliding on Thursday due to a worse-than-expected earnings report along with a cut to its full year financial outlook.

Why Is It Moving?

Before market-open on Thursday, the retail giant reported its second-quarter earnings. 

The company reported a negative year-over-year growth for both its net sales total revenue with a reporting of –8.5% and -8.1%, respectively. In addition, total revenue was reported at $4.087 billion which creates a negative 8.1% year-over-year change. 

The company also failed to meet the consensus analyst estimate of $1.140 with a reporting of $1.110 for its earnings per share (EPS).

The company also cut its full year outlook, which was originally set in the quarter-one report, for its net sales, operating margin and EPS. Kohl’s management originally set a net sales outlook of 0% to 1% and it was cut to –5% to –6%. The previous guidance set the operating margin outlook at 7.0% to 7.2% and it was cut to 4.2% and 4.5%. Finally, the previous EPS outlook was set to $6.45 to $6.85 and was cut to $2.80 to $3.20. 

Overall, it seems that it was a lackluster quarter for the retail giant and that current macro issues are clearly harming the company. “Second quarter results were impacted by a weakening macro environment, high inflation and dampened consumer spending, which especially pressured our middle-income customers. We have adjusted our plans, implementing actions to reduce inventory and lower expenses to account for a softer demand outlook,” said Kohl’s CEO Michelle Gass. 

KSS Price Action: Shares are down 6.48% to $31.75 during Thursday’s premarket trading session, according to Benzinga Pro.

Photo: Courtesy of Mike Mozart on flickr