Kohl's Anticipates Sales And Profit Dip In 2025, Slashes Dividend By 75%, Stock Tanks

Kohl’s Corp KSS shares are plunging in premarket on Tuesday after the fourth-quarter FY24 earnings results.

The company reported a fourth-quarter sales decline of 9.4% year-on-year to $5.175 billion, beating the analyst consensus estimate of $5.145 billion.

Comparable sales for the quarter decreased 6.7%. Gross margin for the quarter expanded by 49 basis points to 32.9%.

Operating income for the quarter was $126 million versus $299 million last year. The operating margin compressed 270 basis points to 2.3%.

Selling, general and administrative expenses decreased 4.5% Y/Y to $1.5 billion. Adjusted EPS of $0.95 beat the consensus estimate of $0.73.

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Kohl’s held $134 million in cash and equivalents as of February 1, 2025. Operating cash flow was $596 million in the quarter. Inventory at the end of the quarter was $2.9 billion, a 2% increase Y/Y.

Kohl’s Board of Directors declared a quarterly cash dividend on the company’s common stock of $0.125 per share. The dividend is payable on April 2 to shareholders of record at the close of business on March 21.

The quarterly dividend is being lowered from $0.50 paid last quarter.

Outlook: Kohl’s expects FY25 sales decline of 5% – 7%. It expects FY25 EPS of $0.10 – $0.60 versus the Street view of $1.25.

Kohl’s anticipates FY25 comparable sales to decrease 4% – 6%. Kohl’s expects an FY25 operating margin of 2.2% – 2.6% and capital expenditures of about $400 million – $425 million.

Price Action: KSS shares trading lower by 16.2% at $10.10 in premarket at last check Tuesday.

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