Kohl's third quartering earnings reveal revenue decline amid CEO's departure
The retailer saw its net income drop by 60% compared to the prior year
Michelle Gass explains what's behind the retailers turnaround on 'The Claman Countdown'
Following the release of Kohl's third-quarter earnings, the retailer withdrew its 2022 sales and profit forecasts on Thursday, citing the volatility of the economy and a CEO transition.
Compared to the prior year, the company's third-quarter revenue dropped by 7% to $4.28 billion, while net income declined by 60% for the year to $97 million or 82 cents per share.
During premarket trading, Kohl's stock fell by 5%. Amid record inflation and growing costs of living, Americans have cut back on shopping, making it difficult for Kohl's to clear out excess inventory despite prolonged item discounts.
Going forward, the company told investors that it does not plan to repurchase more shares until revenue increases, according to Reuters.
TARGET WARNS OF WEAK HOLIDAY SEASON, CEO SAYS CONSUMERS STRESSED
Michelle Gass, chief executive officer of Kohl's Corp., will depart the company in December. (Sarah Silbiger/Bloomberg via Getty Images / Getty Images)
At the start of November, Kohl's announced that its top boss, CEO Michelle Gass, would depart in December for Levi Strauss. Starting December 2, board member Tom Kingsburg will serve as interim CEO while the company searches for a permanent replacement.
"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," said Peter Boneparth, Kohl’s Independent Board Chair, in a statement.
RETAIL SALES RISE FASTER THAN EXPECTED IN OCTOBER
"We look forward to partnering with Interim CEO Tom Kingsbury and the entire leadership team to execute at the highest level this holiday season while also capitalizing on opportunities to strengthen the business."
Kohl's plans to pay off its $668 million revolving loan debt by early December while in the early phase of holiday shopping. The company reportedly paid $57 million in dividends by the end of the third quarter with plans to pay an additional dividend before the end of 2022.