Last updated on March 2nd, 2023 at 01:29 pm
The impact of inflation on consumer spending continues to weigh heavily on Menomonee Falls-based Kohl’s Corp.
The retailer on Wednesday reported a net loss of $273 million for the fourth quarter of fiscal 2022 and $19 million for the full year. That’s compared to earnings of $299 million for the fourth quarter of fiscal 2021 and $938 million for the full 2021 fiscal year.
Compared to the same period last year, Kohl’s disappointing Q4 results were underpinned by a 7.2% decrease in net sales to $5.8 billion and a 7.4% decrease in total revenue to $6 billion. The holiday season provided only a slight boost from the previous quarter’s underwhelming $4.1 billion in net sales and $4.2 billion in total revenue.
For the full year, sales were down 7.1% to $17.1 billion and total revenue was down 6.9% to $18.1 billion. Before withdrawing its 2022 full-year outlook in November, Kohl’s had projected a sales decrease of 5% to 6% year-over-year.
Meanwhile, ongoing efforts to reduce inventory – one major focus in offsetting the impact of softening consumer demand over the past year – appear to be sticking. Fourth quarter inventory assets totaled $3.2 billion, which is up 4% year-over-year, but down 34% from the third quarter of 2022.
“Kohl’s fourth quarter results reflect meaningful proactive measures we took to better position the business for 2023, as well as sales pressure driven by the ongoing persistent inflationary environment,” said Tom Kingsbury, chief executive officer of Kohl’s Corp., who served as interim CEO following the departure of former head Michelle Gass in December.
With about a month under his belt as the company’s new permanent leader, Kingsbury expressed confidence in what lies ahead.
“Our efforts to drive the business are already underway,” he said. “We are refining our strategy and re-establishing merchandise disciplines with a customer-centric focus across the organization. I am confident that our efforts will drive improved, and more consistent, sales and earnings performance over the long-term.”
However, the full-year 2023 outlook Kohl’s released Thursday is not so promising, with an expected 2% to 4% decrease in net sales from 2022.
Following its earnings release, Kohl’s stock is trading at around $27 per share as of Wednesday early afternoon. Over the past year, the company’s stock price has fallen about 52%.