Kohl’s cut its dividend and projected a larger-than-expected sales decline for fiscal 2025, weighing on shares.
Shares fell 24% Tuesday. Ahead of Monday’s market close, the stock was down 14% year to date.
The department-store chain, which is under a new chief executive, joins a growing list of companies that are warning of a slowdown in spending from American households this year as recession fears mount.
Kohl’s expects 2025 sales to fall 5% to 7% on a reported basis and 4% to 6% on a comparable basis, the latter of which adjusts for store openings and closures. Earnings are expected to come in at 10 to 60 cents a share for the fiscal year.
Analysts polled by FactSet had been projecting a comparable sales decline of less than 1% for the year and earnings to at least break $1 a share.
Kohl’s was already facing a decline in traffic after a disappointing back-to-school season led the retailer to cut its guidance ahead of the holidays. CEO Ashley Buchanan, who took the company’s top role in January, stepped in during a period of turmoil as the chain aims to lure back its core customers.
To reduce its costs, Kohl’s on Tuesday said it is cutting its quarterly dividend to 12.5 cents a share, down from 50 cents a share, for the next payout on April 2.
For the quarter ended Feb. 1, Kohl’s posted a profit of $48 million, or 43 cents a share, compared with $186 million, or $1.67 a share, in the same period a year earlier.
Stripping out one-time items, adjusted earnings were 95 cents a share. Analysts had been expecting 73 cents a share.
Sales for the quarter fell 9.4% to $5.18 billion, about in line with analyst estimates. Comparable sales were 6.5% lower.
In the fiscal year ahead, Kohl’s said it aims to regain traction lost in categories such as fine jewelry and intimate apparel while continuing to roll out Sephora shops in its department stores. It also aims to increase the brands covered by its coupons and optimize its store layout.
Write to Dean Seal at dean.seal@wsj.com
