Kohl's stock price was plummeting on Tuesday after the retailer reported a steep decline in sales.
The retailer says net sales were down 8.8% to $3.5 billion and comparable sales fell 9.3% in the third quarter of 2024.
Operating income decreased by 37.6% in the quarter with net income dropping to $22 million, or $0.20 per share, compared to $59 million in 2023's third quarter.
Kohl's revealed a quarterly dividend of $0.50 per share, which will be paid in December.
The company warns it is forecasting a 7 to 8 percent sales decline and lower diluted earnings per share for the fiscal year.
The company put part of the blame for its troubles on having too much unsold merchandise such as apparel and footwear.
"We are not satisfied with our performance in 2024 and are taking aggressive action to reverse the sales declines," CEO Tom Kingsbury said. "We must execute at a higher level and ensure we are putting the customer first in everything we do. We are approaching our financial outlook for the year more conservatively given the third quarter underperformance and our expectation for a highly competitive holiday season."
Since 2020, the retailer has been struggling with finding the right clothing brands for women customers having to eliminate low performing brands such as Jennifer Lopez, Juicy Couture, Dana Buchman, and more.
Partnerships have helped keep Kohl's afloat. Adding an Amazon kiosk to its stores in the summer of 2019 drove foot traffic, specifically attracting a new customer base: millennials.
In 2022, Kohl's added 400 Sephora shops, putting Kohl on track to have 850 Sephora pop-up shops by the end of this year.
Kingsbury will step down in January 2025, with Ashley Buchanan set to succeed him. He will remain on the company's board.
Kohl's has a history of being pursued by buyers even during its weakest performances. JC Penney owners made a surprising $8.6 billion bid to buy it in 2022.
Prior, the board of directors rejected an offer from Starboard Value-backed Acacia Research, an investment group, at $64 a share. Two days later, Sycamore Partners, a private equity firm offered $65 per share, roughly $9 billion for a takeover offer.
The company's stock plunged more than 20% on Tuesday morning and is down around 37% in the past year.
