Kohl’s Corp. jumped after reporting better-than-expected results in the latest quarter, offering some reprieve to the retailer following a tumultuous run of events that included the surprise firing of its top executive.
Comparable sales fell 3.9 percent in the three months ended May 3, slightly better than what analysts were anticipating and outpacing the company’s earlier forecast for a decline between 4 percent and 4.3 percent. Revenue was $3 billion for the quarter, roughly in line with the average analyst estimate. Kohl’s also affirmed its full-year outlook.
“I want to level set that this is a turnaround and will continue to take time. Much of the work remains ahead of us,” Kohl’s chief financial officer Jill Timm said on a call with analysts.
The shares rose 2.8 percent at 11 a.m. in New York, paring most of an earlier gain after a brief pause in trading due volatility. The stock fell 42 percent this year through Wednesday’s close.
Short interest in Kohl’s — bets that offer a payout to investors when a stock declines — account for more than 53 percent of the company’s free float, according to data from S3 Partners. That’s up from 51 percent before the company announced the departure of its chief executive officer at the start of May.
Citigroup analyst Paul Lejuez wrote that the high short interest is helping to fuel the share gains after results came in better than expected.
The retailer’s strategy includes expanding petite sizes to all of its stores, improving its women’s offerings and running promotions for more brands. The retailer said that it doesn’t plan to make major changes to its current strategic plan.
The company’s former CEO, Ashley Buchanan, was ousted for directing millions of dollars of business to a person with whom he had a personal relationship. He had been at Kohl’s for less than four months when he was fired.
The retailer is looking for a new leader, an appointment that will mark Kohl’s fourth top executive since 2018. After Buchanan’s exit, former Walmart executive Michael Bender, who was serving as board chair at Kohl’s, was tapped to lead the company on an interim basis.
While the latest results were better than expected, Kohl’s has still posted quarterly revenue declines for more than three years amid an increasingly competitive retail landscape.
The company released results hours after the US Court of International Trade blocked many of Donald Trump’s tariffs. “In terms of tariffs, I would say it is a fluid situation given the news last night and this morning,” Timm added.
By Lily Meier
Learn more:
Kohl’s Is Looking to Refinance Just as It Searches for a New CEO
The department store company plans to sell $360 million of junk bonds to raise cash to refinance debt coming due this year.
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