• by Sarah Mahoney  @mahoney_sarah, March 11, 2025

Kohl’s Corp. reported a 6.7% drop in comparable fourth-quarter sales, extending a multiyear slide in performance. While that drop was in line with expectations, the news came with a grim forecast: The department store predicts a sales decline of between 5% and 7% in the coming year.

The news was enough to send the company’s stock price to the lowest levels since the 1990s.

“Kohl's customers expect a great product, great value, and a great experience,” said Ashley Buchanan, who took over as CEO of Kohl’s in January, in a call webcast for investors. “Over the past few years, we have implemented a significant amount of change across our assortment, value strategies, and store experience in an effort to attract new customers,” he said, which has “caused friction with core customers.”

He believes the retailer, with 1,100 stores, 60 million customers and 30 million loyalty members, has the potential to recapture former glory. He explained transformation efforts involving both proprietary brands. But he warned investors they’d have to be patient.

“I want to set the expectations that this turnaround, while very achievable, is going to take some time.”

Net sales for the Menomonee Falls, Wisconsin-based company dropped 9.4% to $5.2 billion.

Net income sank to $48 million from $106 million in the year-ago period.

“As has been the case for years, Kohl’s struggled to find the right promotion strategies and mix of private-label and national brands,” writes David Swartz, an analyst who follows the retail sector for Morningstar. “It has also seemingly driven away some core customers by taking out merchandise, including jewelry and some women’s apparel, to make room for Sephora.”

And Buchanan “made it clear that much work needs to be done in terms of merchandising, promotions, and store operations before results improve.”

Neil Saunders, managing director of GlobalData, says many of those problems are evident to consumers. “Kohl’s approach continues to be to throw a lot of things onto the shop floor in the hope that some of the product will gain traction,” he writes. “Stores are uninspiring, hard to shop, and, in some cases, depressing. It is hardly surprising that shoppers continue to abandon Kohl’s and defect to chains like TJMaxx, Target, Amazon, and Walmart.”

Swartz notes that Kohl’s has considerable strengths, “including its reputation for value, partnership with Sephora (comparable sales growth of 13% in the quarter), loyalty program and substantial real estate ownership.”

However, with declining store traffic and sales-per-square-foot dropping since 2010, “we believe Kohl’s large fleet of big-box stores is unnecessary in an increasingly fragmented market.”