Kohl’s Corp. pulled its comparable sales back into positive territory with a 0.4 percent gain in the third quarter, but it wasn’t enough for investors.
Shares of the retailer dropped 10.7 percent to $52.10 in pre-market trading after Kohl’s missed expectations with third-quarter profits and cut its outlook for the year, confirming worries of a tough earnings season for traditional retail.
Net earnings fell 24 percent to $123 million, or 78 cents a diluted share. Adjusted earnings per share were lower, at 74 cents a share, and well below the 86 cents analysts projected. Net sales for the three months ended Nov. 2 slipped 0.1 percent to $4.63 billion.
But the company pointed to the positives.
“We are pleased to report that our business returned to growth during the third quarter, with a comparable sales increase of 0.4 percent,” said chief executive officer Michelle Gass, referring to the second quarter’s comp decrease of 2.9 percent.
“The quarter started off positive in August with another successful back-to-school season and ended strong in October,” Gass said. “We enter the holiday period with momentum and are strategically increasing our investments to take advantage of the unique opportunity to fuel growth and customer acquisition. We believe that investing in the short-term will support our strategies to drive profitable growth over the long-term.”
The company adjusted its annual outlook to adjusted EPS of $4.75 to $4.95, down from the prior guidance calling for $5.15 to $5.45.