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Kohl's slashes 2022 forecasts as inflation squeezes demand
By Arghyadeep Dutta - Aug 18, 2022, 11:06 AM ET
Last Updated - Jul 18, 2023, 04:32 PM EDT
• Kohl’s said inflation has pressured its middle-income customers
Kohl’s
Corp (NYSE: KSS) on Thursday lowered its full-year sales and profit forecasts, saying its middle-income customers are under the pressure of
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higher inflation, putting a damper on sales of apparel, shoes and other
discretionary items.
Shares
of the US departmental store chain dropped as much as 10% as it joined a
host of other retailers, including Target Corp (NYSE: TGT) and Best Buy
Co (NYSE: BBY), who also warned of a profit squeeze for the year.
Decades-high
inflation and recession fears forced Americans to minimize spending on
clothing, shoes and other non-essentials, leaving the retailers with
bloated inventories.
Excess
stocks have forced retailers to offload inventories through steep
discounts and clearance sales, with Kohl’s offering up to 80% discounts
on its website.
Kohl’s
Chief Executive Michelle Gass, in a statement, said this year “has
turned out to be more challenging than initially expected.”
The
Wisconsin-based retailer now expects 2022 earnings per share in the
range between $2.80 and $3.20, down from the $6.45 to $6.85 range
estimated earlier. Analysts, on average, expect a profit of $4.06 per
share.
The
company also projected full-year net sales to fall between 5% and 6%,
compared with its previous forecast of flat to 1% growth. Net sales in
the second quarter fell 8.5% to $3.86 billion.
Picture Credit: CNBC
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