Kohl’s sees home sales settling back into their traditional cadence following their out-sized performance during the pandemic.
Menomonee Falls, Wis. – Kohl’s middle-income shoppers have shifted their spending, and the company expects more of the same in the back half.
Customers are making fewer shopping trips, spending less per transaction and pivoting to Kohl’s private label brands for value, CEO Michelle Gass told investors during this week’s quarterly call. The company is responding by clearing out excess goods, pulling back on receipts and stepping up promotions.
“We expect sales to remain soft given the economic backdrop,” she added.
The home category underperformed during the second quarter. The company sees home sales settling back into their traditional cadence following their out-sized performance during the pandemic.
For the back half of the year, the home assortment is focused on sharp price points and newness. “We need to show up with value,” said Gass.
Revenues for the quarter ended July 30 fell 8.5% to $4.1 billion, with comp down 7.7%. Digital were flat to last year. Total digital sales accounted for 28% of total sales, up from 26% in the year-ago quarter.
Net income fell 43% to $143 million, or $1.11 per diluted share.
The company cut its full-year guidance this morning. Kohl’s now expects a sales decline between of 5% to 6%, compared with a prior forecast of flat to up 1. The update pegs adjusted earnings per share to be between $2.80 and $3.20, compared with earlier guidance of $6.45 to $6.85.
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