US department store chain Kohl’s has disclosed a downturn in net sales for the fiscal year 2024 (FY24), a 7.2% decline to $15.38bn from the previous fiscal year’s $16.58bn.
The company’s comparable sales also fell 6.5%.
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During the period, the retailer recorded operating income of $433m, a significant drop from $717m reported in the preceding year.
Net income for Kohl’s settled at $109m, equating to earnings per share (EPS) of $0.98, in stark contrast to the previous year’s net income of $317m, or $2.85 per diluted share in FY23.
However, gross margin improved slightly to 37.2% of net sales, up by 50 basis points.
The retailer’s selling and general and administrative expenses saw a modest reduction of 3.7% from the previous year, totalling $5.3bn and accounting for 32.7% of total revenu – an increase of 118 basis points on a year-on-year basis.
In the fourth quarter (Q4) of the fiscal year, net sales of Kohl’s fell by 9.4% year-on-year to $5.17bn.
This was partly attributable to the inclusion of $164m in net sales from an extra week in the previous fiscal quarter.
The company’s net income for the quarter stood at $48m or $0.43 per diluted share, compared to the previous year’s net income of $186m or $1.67 per diluted share.
Operating income also dropped to $126m in Q4 FY24, against the previous year’s $299m, resulting in operating income as a percentage of total revenue falling to 2.3%, down by 270 basis points on a year-on-year basis.
The retailer’s gross margin as a percentage of net sales increased by 49 basis points to 32.9%.
Looking ahead into fiscal 2025, Kohl’s anticipates net sales to decline further, falling between 5% and 7%, with comparable sales expected to decrease between 4% and 6%.
The company forecasts diluted EPS to range between $0.10 and $0.60 for the full year.
Kohl’s chief executive officer Ashley Buchanan stated: “We have identified key areas of focus and are taking action in 2025 to reposition Kohl’s for future success. Our customers expect great product, great value and a great experience from Kohl’s. I am confident that the areas we identified will deliver on what customers want and expect from Kohl’s.”
In January 2025, Kohl’s initiated a workforce reduction, trimming almost 10% of its corporate staff.
