Kohl's stock sinks on gloomy annual profit and sales forecast

Investing.com -- Shares in Kohl's (NYSE:KSS) fell sharply after the U.S. department store retail chain operator issued an annual profit forecast that notably fell short of analyst expectations.

The company's stock sank more than 17% in premarket trading Tuesday.

For the fourth quarter of fiscal 2024, Kohl's reported adjusted diluted earnings per share (EPS) of $0.95, exceeding analyst expectations of $0.73. Revenue for the period came in at $5.18 billion, in line with consensus estimates.

Gross margin improved to 32.9% from 32.4% a year ago, slightly above the expected 32.7%.

Kohl's reported a quarterly operating income of $126 million, missing the projected $185.8 million.

“Kohl’s is built on a strong foundation that includes operating more than 1,100 conveniently located stores nationwide, serving over 60 million customers, with 30 million of those customers being Kohl’s Loyalty Members," Ashley Buchanan, Kohl’s Chief Executive Officer said in a press release. 

“We have identified key areas of focus and are taking action in 2025 to reposition Kohl’s for future success," he added. 

The negative premarket reaction in Kohl's shares comes due to a disappointing forecast. The company expects its diluted EPS of between $0.10 and $0.60, a far cry from the $1.32 expected by analysts.

The retailer forecasts net sales to decline between 5% and 7%. Comparable sales are anticipated to be down 4% to 6%, compared with estimates for a 0.9% drop.

Operating margin is projected to range from 2.2% to 2.6%.

Kohl's also said it plans capital expenditures of $400 million to $425 million for 2025.