The supermarket chain on Thursday offered a bleak outlook for 2022, saying it expects full-year sales to fall 5% to 6% compared to last year, and blamed high inflation for preventing shoppers – specifically middle-income consumers – from spending more. . in its stores. The company also reported a decline in sales and profits for the quarter ended July 30.
Kohl’s shares are down more than 4% in morning trading.
“We have revised our plans and implemented measures to reduce inventory and cut costs to accommodate lower demand expectations,” Cole CEO Michael Gass said in a statement.
Of course unstable
With more than 1,100 US stores and approximately $19 billion in annual sales, Kohl’s is the largest department store chain in the United States. But the company has struggled to find a way forward on its own.
And last week, the retailer announced that it’s rolling out a self-delivery option at all of its online stores within two hours.
All of these efforts, while necessary for Kohl’s, said Neil Saunders, retail analyst and managing director at GlobalData Retail, cannot fully mask the chain’s underlying problem.
“In our view, the main source of Kohl’s problems is internal. Most notably, the company has lost ground in terms of marketing and range planning and appears to be taking a haphazard approach to purchasing. The result is a jumble of disassembled product in stores, exacerbated by a very serious deterioration in store management standards” Saunders said in a note Thursday.
“It was just that, while Coles was a bit uninspiring, he was both disciplined and elegant in his presentation. Over the past year, it all went out the window,” Saunders said. “In this kind of economic environment, consumers will quickly abandon high-effort purchases and stores for very little reward.”
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