Kohls Smashes Q4 Earnings Expectations, Analyst Cuts Forecast On Disappointing Guidance, Turnaround Underway

Shares of Kohls Corp KSS tanked in early trading on Wednesday, after the company reported its fourth-quarter results.

The company controlled its SG&A expenses to report a "solid" earnings beat, despite a significant gross margin miss, according to Telsey Advisory Group.

The Kohls Thesis: Analyst Dana Telsey maintained a Market Perform rating, while cutting the price target from $13 to $10.

The Kohls Thesis: Despite the earnings beat, the company announced its 2025 outlook significantly below "the market’s prior (already-modest) expectations," Telsey said in the note.

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The CEO indicated strategic initiatives will be undertaken over the next few quarters and that the turnaround will take time to complete, as Kohls is "a long lead-time business," she added.

"New leadership will look to bring stabilization to the business following several years of volatile performance, but visibility to a timeline to a turnaround to better profitability is challenging in our view, particularly against an increasingly uncertain macro backdrop," the analyst wrote.

Even after improvements in the assortment, value proposition and customer experience, it will take time for Kohls to win back consumers, she further stated.

KSS Price Action: Shares of Kohls had declined by 7.38% to $8.48 at the time of publication on Wednesday.

Read More: Kohl’s CEO Warns Of ‘Pretty Challenging’ Environment For Consumers

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