Kohl’s plunge on profit warning

Kohl’s Corporation (NYSE: KSS) closed 22.8% lower on Thursday after the department store firm and Sephora’s US partner.

It followed an unexpected loss for the past quarter and a profit warning.

Kohl’s ‘mid-tier’ department store chain saw a $27 million loss for the first three months of the year which equated to 24 cents loss per share – a lot worse than Wall Street forecasting expected, as consensus had pencilled in a 5 cents per share profit.

At $3.2 billion revenue was down 5.3% from the same period last year, and was $200 million shy of Wall Street’s prediction of $3.4 billion. Same-store sales were down 4.4%.

The retailer blamed the decline in cash receipts on a higher proportion of ‘clearance sales’ during the trading period.

"Our first quarter results did not meet our expectations and are not reflective of the direction we are heading with our strategic initiatives," chief executive Tom Kingsbury said.

Kingsbury, meanwhile, pointed to stronger growth in sales of Sephora beauty products.

"We continue to have high conviction in our strategy and believe that our key growth initiatives, including Sephora, home decor, gifting, impulse, and our upcoming partnership with Babies 'R' Us, will contribute more meaningfully going forward," the Kohl’s boss added.

Closing at $21.02 per share, Kohl’s stock had given up 22.95% for the trading day.