Why Are Kohl’s Shares Tumbling? Stock Price Down Over 17%

Kohl’s (KSS) share price plummeted over 17% as it released its third-quarter earnings report below expectations for the retailer.

The company saw its comparable sales increase by only 0.4%, compared to its 2.5% increase for the same quarter in 2018. Total revenue for the quarter was $4.6 billion, with its reported net income at $123 million. Diluted earning per share was $0.78.

Kohl’s attributed the lower than expected sales to an “increasingly competitive promotional environment,” which it expects to continue throughout the year. In addition, Kohl’s said the warmer than expected fall weather affected sales, which saw its women’s segment reach the lowest earnings for the quarter.

Based on its Q3 performance, Kohl’s issued an adjusted guidance for its adjusted annual earnings per diluted share to $4.75 to $4.95, down from its earlier projections of $5.15 to $5.45. Kohl’s said the lower guidance was based on continued expectations of merchandise discounting among competitors through the rest of the year.

"We are pleased to report that our business returned to growth during the third quarter, with a comparable sales increase of 0.4%,” Michelle Gass, CEO at Kohl’s said.

“The quarter started off positive in August with another successful back-to-school season and ended strong in October. We enter the holiday period with momentum and are strategically increasing our investments to take advantage of the unique opportunity to fuel growth and customer acquisition.

“We believe that investing in the short-term will support our strategies to drive profitable growth over the long-term,” she added.

Shares of Kohl’s stock were down 17.67% as of 12:07 p.m. EST on Tuesday.