Last updated on November 18th, 2020 at 02:19 pm
Menomonee Falls-based Kohl’s Corp. on Tuesday reported a 13.3% decrease in comparable sales and a net loss of $12 million for the third quarter of fiscal 2020.
Total revenue was $3.97 million, down 14% from the same period last year.
Kohl’s said its Q3 performance exceeded expectations as the retailer continues to weather the COVID-19 pandemic and subsequent financial crisis. Despite a slow back-to-school season, the company saw “significant improvement” in overall sales and earnings compared to last quarter, which brought a 22.9% decrease in comparable net sales and a net loss of $47 million.
The retailer lost $500 million during the first quarter of fiscal 2020 after temporarily shutting down its entire store footprint at the onset of the pandemic. In September, the retailer reduced its corporate workforce by approximately 15% due to “ongoing pressures of the COVID-19 pandemic on the business.”
“I continue to be very proud of how our organization is navigating through the COVID-19 pandemic,” said chief executive officer Michelle Gass in a statement.
Digital sales for Q3 were up more than 25% over last year. In addition, Kohl’s fully paid off a $1 billion revolver loan balance, ending the quarter with $1.9 billion in cash.
Kohl’s made several adjustments this year’s holiday shopping season, considering the pandemic, including a greater emphasis on the early portion of the season with an early Black Friday campaign, Gass said, adding the company is so far pleased with how the season has kicked off.
“From a product standpoint, we are leaning into product categories that have been performing for us, categories like home, active and even toys, that become even more important during the holiday season,” she said.
With an increase of online holiday shopping expected this year, Kohl’s will have to put in extra effort to drive traffic to its 1,100 store locations, which remain a pillar of its business model, by raising awareness of its store and curbside pick-up services. The company has rolled out additional in-store health and safety measures, such as limited hours, increased cleaning and social distancing markings.
The company expects to see more “practical gifting” and focus on value during this holiday season, Gass said.
Beyond the holidays, Kohl’s will continue focusing on high-growth product categories such as active, which will see a 20-30% expansion of in-store space in 2021. Also next year, Kohl’s will launch FLX, its own private athleisure brand for men and women.
Kohl’s said it will exit eight underperforming brands, including Chaps and Apt. 9 in women’s, as it shifts focus toward the Nine West brand. It also plans to expand its Lands’ End brand line to 300 more stores and introduce Cole Haan as a new offering in the shoe category.
The company also has its sights set on beauty as a major growth area, expecting to triple the category’s sales next year. Kohl’s recently expanded its elevated beauty shops to 62 stores, and has seen a positive customer response from its recent launch of Lauren Conrad Beauty.