Kohl's (KSS) Q3 2024 Earnings
How Did KSS Stock React to Q3 2024 Earnings?
S&P 500 over the same 30 days: −2.07%.
Did KSS Beat Earnings? Q3 2024 Results
No. Kohl's reported Q3 2024 earnings of $0.20 a share on Nov 26, 2024, missing the $0.27 consensus estimate by 26.8%. Revenue was $3.7B against a $3.7B estimate.
Kohl's delivered a bruising third quarter for fiscal 2024, posting GAAP diluted EPS of $0.20, a sharp miss against the $0.27 consensus estimate that left the retailer trailing expectations by nearly 27%, even as revenue of $3.71 billion edged fractionally ahead of forecasts. The top-line figure still represented a steep 8.5% decline from a year ago, underscoring the depth of the company's struggles, with persistent weakness in its core apparel and footwear businesses driving comparable sales down 9.3%. Net income collapsed to $22.00 million from $59.00 million in the year-ago quarter, and shares tumbled to their lowest levels since 2020 as investors absorbed both the results and a dramatically lowered full-year outlook. Management now expects net sales to fall 7% to 8% and diluted EPS to land between $1.20 and $1.50, reflecting a highly competitive holiday environment. Adding to the turbulence, CEO Tom Kingsbury announced he would step down in January 2025, with retail veteran Ashley Buchanan named as his successor.
- Net sales declined 8.8% and comparable sales declined 9.3% driven by softness in core apparel and footwear businesses
- Key growth areas (Sephora, home decor, gifting, impulse) delivered strong collective performance but unable to offset core declines
- Gross margin expanded 20 basis points driven by inventory management and lower freight expense, partially offset by higher digital penetration and increased promotional activity
- SG&A expenses declined 5.1% through tightly managed corporate and store-related expenses
- Impulse sales grew more than 40% in Q3 with queuing lines added in 200 additional stores
- Sephora delivered Q3 growth of more than 9% with solid demand in fragrance, hair care, Yves Saint Laurent, and Laneige
- Inventory reduced 3% year-over-year despite in-transit inventory increasing more than 40%
“Our third quarter results did not meet our expectations as sales remained soft in our apparel and footwear businesses. Although we had a strong collective performance across our key growth areas, including Sephora, home decor, gifting, and impulse, and also benefited from the opening of Babies "R" Us shops in 200 of our stores, these were unable to offset the declines in our core business. Importantly, we delivered gross margin expansion and managed expenses tightly in the quarter.”
Kohl's CEO, on the earnings call
What Was Kohl's's Outlook in Q3 2024?
For full year 2024 (52 weeks vs. 53 weeks in 2023), Kohl's updated its outlook downward: net sales decrease of 7% to 8% (previously 3% to 5% decline), comparable sales decrease of 6% to 7% (previously 5.5% to 6.5% decline), operating margin of 3.0% to 3.2% (previously 3.0% to 3.3%), diluted EPS of $1.20 to $1.50, and capital expenditures of approximately $500 million including Sephora expansion and store investments. Management expects a highly competitive holiday season and is taking aggressive action to reverse sales declines including increased promotional activity, repositioning juniors, reintroducing fine jewelry, expanding petites, and rebalancing inventory toward private brands.
KSS YoY Financials
| Metric | Q3 2024 | Q3 2023 | Year over year |
|---|---|---|---|
| Revenue | $3.7B | $4.1B | −8.5% |
| Gross Profit | $1.4B | $1.5B | −9.7% |
| Operating Income | $98.0M | $157.0M | −37.6% |
| Net Income | $22.0M | $59.0M | −62.7% |
KSS Revenue by Segment
Figures from SEC filings and company reports. Not investment advice.