The Kohl’s logo is displayed on the exterior of a Kohl’s store on January 24, 2022 in San Rafael, California.
Justin Sullivan | Getty Images
Kohl’s on Thursday withdrew its full-year outlook, pointing to volatility in the retail environment and significant macroeconomic headwinds, on top of its “unexpected CEO transition.”
Kohl’s also reported third quarter earnings on Thursday, with revenue dropping 7% to $4.28 billion. The company warned investors of this drop in revenue earlier this month when it provided preliminary results for the quarter. Kohl’s also said it would not provide guidance for the holiday-shopping quarter.
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Shares of the company fell 4% in premarket trading.
Kohl’s has been under pressure from activist investors as its sales have declined and its stock has slumped. Over the summer, Kohl’s ended talks to sell its business to The Vitamin Shoppe owner Franchise Group, blaming the tough retail environment that worsened since the beginning of the bidding process.
Activists Ancora Holdings and Macellum Advisors have also pushed for change at the leadership level.
Earlier this month, Kohl’s said Chief Executive Michelle Gass would leave in December. She will join Levi Strauss to be its CEO in waiting. Gass will hand over the role of CEO to Tom Kingsbury, a Kohl’s board member, will serve as interim CEO beginning Dec. 2, while the retailer searches for a permanent leader. Ancora applauded Kingsbury’s appointment earlier in November.
“The Kohl’s board is focused on supporting the management team during this CEO transition period, as well as the board’s search committee in its pursuit of finding the next CEO to lead Kohl’s,” Peter Boneparth, the independent board chair, said in Kohl’s earnings release.
Still, the retailer has rejected criticism from activist investors, moving forward with plans to redesign stores, add new brands and offer more e-commerce options for customers.
Kohl’s has said in recent quarters that inflation has burdened its middle class customers, causing shoppers to visit the store less, and spend less, either buying fewer items or less expensive brands.
Kohl’s pulled its guidance after cutting its forecasts in August, when it reported second-quarter earnings.
This story is developing. Check back for updates.
(With inputs from CNBC)