Company Overview - Kohl's shares increased by 8% to $7.17 in the last trading session, with a higher-than-average trading volume, despite a 40.9% loss over the past four weeks [1] - The company is focusing on effective inventory and expense management, with key growth categories including Sephora, home decor, and impulse items, contributing to its recent success [2] Financial Performance - Kohl's is expected to report a quarterly loss of $0.53 per share, reflecting a year-over-year decline of 120.8%, with revenues projected at $3.13 billion, down 7.5% from the same quarter last year [2] - The consensus EPS estimate for Kohl's has been revised 94% lower in the last 30 days, indicating a negative trend in earnings estimate revisions, which typically does not lead to price appreciation [4] Industry Context - Kohl's operates within the Zacks Retail - Regional Department Stores industry, where another competitor, Dillard's, saw a 1.1% decrease in its stock price, with a return of -11.1% over the past month [4] - Dillard's consensus EPS estimate has changed by -2.1% to $9.10, representing a year-over-year change of -17.9%, and it currently holds a Zacks Rank of 4 (Sell) [5]

Core Viewpoint - Kohl's stock has faced significant declines, dropping nearly 22% week to date, following the announcement of a top executive's departure and a critical analyst report [1]. Executive Departure - Kohl's chief technology and digital officer, Siobhán McFeeney, announced her departure in a regulatory filing, with no information provided on her successor or ongoing search for a replacement [2]. Digital Operations Concerns - The retail sector's competitiveness makes a strong digital operation essential, and the sudden exit of a key executive raises concerns about Kohl's ability to maintain its online sales performance [3]. Analyst Recommendations - UBS analyst Jay Sole reiterated a sell recommendation for Kohl's stock, setting a price target of $5, citing the company's struggles in competitiveness regarding price, products, and service [3][4]. Market Positioning - The analyst's view suggests that Kohl's operates like a traditional brick-and-mortar retailer, failing to adapt to modern retail challenges, indicating a cautious outlook for the stock [5].

Employee and Workplace Culture - The average employee count for 2024 was approximately 87,000 associates, including about 33,000 full-time and 54,000 part-time associates[17]. - The company offers a 100% match (up to 5% of pay) in its 401(k) Savings Plan after one year of employment for eligible associates[23]. - The company has eight Business Resource Groups (BRGs) with over 10,000 unique members to foster inclusion and belonging[20]. - The company emphasizes a culture of safety and wellness, providing associates with 24/7 access to medical professionals following work accidents[18]. Financial Performance - The company reported net sales of $15.385 billion for the fiscal year 2024, down 7.2% from $16.586 billion in 2023[226]. - Total revenue for 2024 was $16.221 billion, a decrease of 7.2% compared to $17.476 billion in 2023[226]. - The company's net income for 2024 was $109 million, a decline of 65.6% from $317 million in 2023[226]. - Operating income for 2024 was $433 million, a decrease from $717 million in 2023[226]. - Net sales for 2024 totaled $15,385 million, a decrease of 7.2% from $16,586 million in 2023[259]. - Women's category sales decreased to $3,817 million in 2024 from $4,281 million in 2023, representing a decline of 10.8%[259]. Assets and Liabilities - As of February 1, 2025, the company's merchandise inventories balance was $2.9 billion, an increase from $2.88 billion the previous year[213]. - The company reported a decrease in total assets from $14.009 billion in 2024 to $13.559 billion in 2025[224]. - The company’s total shareholders' equity decreased to $3.802 billion from $3.893 billion in the previous year[224]. - Accrued liabilities increased to $1,263 million in 2025 from $1,201 million in 2024, reflecting a rise of 5.2%[247]. - The company had $97 million in obligations under the supplier financing program as of February 1, 2025, up from $19 million in 2024[249]. - Total lease liabilities amounted to $4.885 billion as of February 1, 2025, down from $5.199 billion in February 2024[287]. Debt and Financing - Outstanding borrowings under the $1.5 billion revolving credit facility were $290 million as of February 1, 2025[202]. - The company is subject to interest rate risk due to $500 million of notes issued in March 2021, which include coupon rate step-ups if the long-term debt is downgraded[201]. - Long-term unsecured senior debt decreased from $1.638 billion in February 2024 to $1.174 billion in February 2025, with an effective interest rate at issuance of 4.73%[277]. - The company completed a voluntary redemption of $113 million of 9.50% notes in June 2024, recognizing a $5 million loss on extinguishment of debt[278]. - Future lease payments total $8.672 billion, including $4.990 billion for operating leases and $3.682 billion for finance leases[287]. Tax and Regulatory Matters - The company had gross unrecognized tax benefits of $184 million as of February 1, 2025, indicating potential tax liabilities[217]. - The effective tax rate for 2024 was 3.9%, significantly lower than 15.1% in 2023 and 68.1% in 2022[296]. - The company recorded a tax provision of $5 million in 2024, compared to $56 million in 2023 and a tax benefit of $39 million in 2022[296]. - The balance of unrecognized tax benefits was $184 million as of February 1, 2025, down from $200 million in 2023[298]. Shareholder Information - The company retired 35 million shares of treasury stock in 2024, following the retirement of 217 million shares in 2023[257]. - The company had 111 million basic shares outstanding in 2024, compared to 110 million in 2023, with diluted shares increasing from 111 million to 112 million[270]. - The company had 7.7 million shares authorized and 6.3 million shares available for grant under the 2024 Long-Term Compensation Plan as of February 1, 2025[302]. - Nonvested stock awards increased to 4.863 million shares by the end of 2024 from 3.099 million shares in 2023[306]. - A quarterly cash dividend of $0.125 per share was declared on March 11, 2025, to be paid on April 2, 2025[315]. Internal Controls and Audits - Management assessed the effectiveness of internal control over financial reporting as of February 1, 2025, concluding it was effective based on COSO criteria[322]. - Ernst & Young LLP audited the internal control over financial reporting and expressed an unqualified opinion on its effectiveness as of February 1, 2025[325]. - There were no changes in internal control over financial reporting during fiscal 2024 that materially affected its effectiveness[324]. - The company maintained effective disclosure controls and procedures as evaluated by its management[318]. Legal Matters - The company is subject to certain legal proceedings, but management believes the outcomes will not have a material adverse effect on the financial statements[314].

Core Insights - Kohl's Corporation is focusing on strategic growth through enhancing customer experience, optimizing inventory, and expanding its omnichannel presence [1] - The partnership with Sephora is a significant growth driver, with comparable beauty sales increasing by 13% in Q4 fiscal 2024 [2] - Despite positive developments, Kohl's faces challenges with declining digital sales, which fell by 13.4% in Q4 fiscal 2024 [9] Group 1: Growth Strategies - The Sephora partnership is crucial for growth, with strong demand in fragrance, bath & body, and skincare categories [2] - Kohl's is optimizing inventory management and has made progress in rebuilding proprietary brand inventory [3] - The company is reinforcing proprietary brands and refining its assortment strategy to enhance value [5] Group 2: Cost Management - Kohl's reduced SG&A expenses by 4.5% in the quarter, contributing to improved gross margin by 49 basis points to 32.9% [4] - The company expects further gross margin expansion of 30-50 basis points in fiscal 2025 due to effective inventory control and higher proprietary brand sales [4] - SG&A expenses are projected to decline by 3.5% to 5% in fiscal 2025, supported by cost-cutting measures [4] Group 3: Market Challenges - Digital sales have declined by 8.7% for the full year, primarily due to weakness in the home category [9] - The company projects net sales to decline between 5% and 7% in fiscal 2025, with comparable sales expected to drop 4% to 6% year over year [10] - Kohl's has decided to reduce its dividend rate, indicating anticipated financial strain [10] Group 4: Future Outlook - The company sees growth potential in underpenetrated categories like jewelry and fashion accessories [6] - Kohl's aims to build a stronger presence in home decor and beauty through its Sephora partnership [8] - The success of Kohl's will depend on its ability to adapt to shifting consumer preferences and strengthen its digital presence [11]

Core Viewpoint - Kohl's Co. shares have reached all-time lows following a disappointing fiscal fourth quarter earnings report, despite a commendable earnings-per-share (EPS) beat, with gloomy forward guidance [1][8]. Financial Performance - Kohl's reported an EPS of 95 cents, exceeding consensus estimates by 23 cents or 27%, but revenues fell 9.4% year-over-year (YOY) to $5.17 billion, missing the $5.19 billion consensus [7]. - Comparable sales decreased by 6.7% YOY, and inventory grew by 2% YOY to $2.9 billion [7]. - For fiscal 2026, management expects EPS between 10 cents to 80 cents, significantly below the consensus estimate of $1.18, with revenue expectations of $14.32 billion to $14.63 billion, missing the $15.45 billion consensus [8]. Leadership and Strategy - New CEO Ashley Buchanon, who took over on January 15, 2025, emphasized that any turnaround will take time and grounded expectations for immediate recovery [2][4]. - The company has implemented a three-pillar comeback strategy focusing on a balanced product assortment, reestablishing quality and value, and enhancing the omnichannel shopping experience [5][4]. Market Reaction - Following the earnings report, Kohl's stock plunged 24% the next day and continued to fall another 11% in subsequent days, reflecting a lack of confidence in the company's outlook [6]. - The market capitalization has fallen to less than $1 billion, while the company's real estate holdings are valued at over $6 billion, raising questions about potential value opportunities [9].

Core Viewpoint - Kohls Corp reported a fourth-quarter earnings beat but faced a significant gross margin miss, leading to a decline in share price [1][2]. Financial Performance - The company managed to control SG&A expenses, resulting in a "solid" earnings performance despite the gross margin miss [1]. - Kohls' shares dropped by 7.38%, reaching $8.48 at the time of publication [4]. Future Outlook - The 2025 outlook provided by the company is significantly below market expectations, indicating challenges ahead [2]. - The CEO mentioned that strategic initiatives will be implemented over the next few quarters, but the turnaround will require time due to the long lead-time nature of the business [2][3]. Leadership and Strategy - New leadership aims to stabilize the business after years of volatility, but the timeline for achieving better profitability remains unclear [3]. - Despite improvements in product assortment, value proposition, and customer experience, regaining consumer trust will take time [3].

Core Viewpoint - Kohl's Corp shares have experienced a significant decline, dropping 25.1% amid disappointing quarterly results and a bleak outlook for the upcoming year [1] Financial Performance - In the fourth quarter, Kohl's reported a revenue decline of 9.4% year over year and same-store sales decreased by 6.7% [2] - The earnings per share (EPS) for the quarter was $0.95, down from $1.67 in the previous year, although it exceeded Wall Street's expectation of $0.75 [2] Market Value and Trends - Over the past year, Kohl's has lost 65% of its market value, with its current market capitalization just above $1 billion, a significant drop from potential acquisition offers that valued it at up to $9 billion in 2022 [3] Future Outlook - The company's outlook for 2025 is pessimistic, expecting same-store sales to decline by 4% to 6%, which is worse than the anticipated 0.55% decline [4] - Kohl's has set an EPS target range of $0.10 to $0.60 for 2025, significantly below Wall Street's estimate of $1.24 [4] - Plans have been announced to cut approximately 10% of the corporate workforce and close 27 stores by April as part of efforts to improve the company's situation [4]

Group 1 - Kohl's Corporation (NYSE: KSS) has experienced a significant decline in share value, losing 63% over the past year due to unsuccessful turnaround efforts [1] - The company's repeated attempts to improve its business have not yielded positive results, continuing a trend of underperformance [1] Group 2 - The article does not provide any specific financial metrics or future projections for Kohl's Corporation [1]

Financial Data and Key Metrics Changes - Net sales declined by 9.4% in Q4 and 7.2% for the year, with comparable sales decreasing by 6.7% in Q4 and 6.5% for the year [28] - Gross margin in Q4 was 32.9%, an increase of 49 basis points, while for the full fiscal year 2024, gross margin increased by 50 basis points to 37.2% [36][37] - Adjusted net income for Q4 was $106 million, with adjusted earnings per diluted share at $0.95, and for the year, adjusted net income was $167 million with adjusted earnings per diluted share at $1.50 [40] Business Line Data and Key Metrics Changes - Sephora continued to be a strong sales driver with comparable beauty sales increasing by 13%, an acceleration from Q3 [31] - Accessories business excluding Sephora had a flat comparable sales performance, driven by strong performance in fashion and bridge jewelry [33] - Key growth categories such as impulse, gifting, home decor, and baby gear showed collective outperformance, although legacy home business remained challenged [35] Market Data and Key Metrics Changes - Store comparable sales declined by 3.1% in Q4 and were down 5.6% for the year, while digital business experienced a decline of 13.4% in Q4 and 8.7% for the year [29][30] - The decline in digital sales was attributed to softness in home categories and an online inventory suppression issue [30] Company Strategy and Development Direction - The company aims to offer a curated, balanced assortment that fulfills needs across all customers, reestablish itself as a leader in value and quality, and enhance its omnichannel platform for a frictionless experience [9][26] - The focus will be on strengthening proprietary brands and simplifying promotional offers to improve customer experience [13][19] - The company plans to rebuild cash balance, reduce reliance on revolver, and capitalize on opportunities to further reduce debt and overall leverage [49] Management's Comments on Operating Environment and Future Outlook - Management acknowledges that the turnaround will take time and emphasizes the need for a clear vision and accountability in execution [8][27] - The macro environment presents uncertainty, particularly for lower-income customers who are constrained in discretionary spending [78][80] - The company expects net sales to decrease by 5% to 7% in 2025, with comparable sales expected to decrease by 4% to 6% [44] Other Important Information - The company announced the closure of 27 underperforming stores and one e-commerce fulfillment center, resulting in a one-time charge of $76 million [40][41] - Capital expenditures for 2025 are expected to be in the range of $400 million to $405 million, focusing on Sephora rollout and omnichannel enhancements [50] Q&A Session Summary Question: Assessment of merchandising strategy and confidence in returning to growth - Management sees significant opportunity in product offerings, value, and quality, acknowledging past missteps that created friction with core customers [54][56] Question: Implications for margins with private label brands and promotional offers - Management believes there is potential to improve efficiency in promotions and allocate savings to enhance price points, while also addressing the mix of proprietary and national brands [62][65] Question: Store profile and merchandise assortment - The company has a healthy store fleet with very few unprofitable stores, and management is focused on reallocating space effectively among categories [72][73] Question: Customer performance and macroeconomic factors - Management notes a bifurcation in customer income levels, with lower-income customers facing challenges, impacting discretionary spending [78][80] Question: Initiatives and changes in the business - Management outlines that changes will take time, with tactical short-term moves being prioritized while developing a long-term strategy [86][88] Question: Expectations for Sephora and addressing core customer friction - Sephora is expected to continue driving new customers, but management acknowledges that past changes caused friction with the core customer base [107][111] Question: Promotion efficiency and cost allocation - Management discusses the need to improve promotional strategies to better align with customer expectations and enhance perceived value [118][119]

Core Insights - Kohl's is anticipating a challenging 2025 as the new CEO initiates a long-term turnaround strategy, projecting a revenue decline of 5% to 7% for the year, with comparable sales down 6.5% for the quarter [1] - The CEO acknowledged that many of the company's issues were self-inflicted due to past decisions, emphasizing the need to reconnect with loyal customers [2] - The company has recognized that the exclusion of private brands and certain brands from coupons has led to customer confusion and frustration, which is now being addressed [3] Customer Behavior and Market Conditions - Customers are increasingly seeking value, particularly those with lower income levels, indicating a broader trend of consumers feeling financially constrained [4] - The notion of living paycheck-to-paycheck is not solely tied to financial hardship but also reflects how individuals manage their income [5] - The CEO expressed optimism about Kohl's recovery but noted that restoring growth will require time and a thorough review of the business strategy [5]