- Kohl’s had a disappointing fourth quarter, with net sales dropping nearly 10%. Earlier this year, the department store chain announced corporate layoffs and store closures. But a retail expert told Fortune the “real issue” with Kohl’s is that it lacks identity and a solid business strategy.
Even the sometimes tongue-in-cheek popularity of Kohl’s Cash hasn’t helped the department store chain the past year. Kohl’s reported disappointing earnings Tuesday that were lower than Wall Street’s expectations.
Kohl’s reported a 9.4% drop in fourth-quarter net sales, cut its dividend, and changed its guidance for a 5%-to-7% sales decline in 2025. Analysts polled by market analysis firm FactSet had projected a comparable sales decline of less than 1% for the year and had anticipated earnings per share would be at least $1, but Kohl’s reported just $0.43 earnings per share.
In premarket trading, Kohl’s shares fell a whopping 17% to $10 on earnings news. As of Tuesday afternoon, shares were hovering around $9.22, a near 24% drop for the day.
The lackluster results come at the heels of a tumultuous year for the retailer. In late January, the company held corporate layoffs just weeks after announcing store closures for 27 locations. Jen Johnson, SVP of corporate communications at Kohl’s, previously told Fortune these decisions were taken “very seriously” and were done to “support our commitments to increase efficiencies and improve profitability in the business for the long-term benefit of our associates and customers.”
Kohl’s declined to provide further comment to Fortune about the company’s most recent earnings report and whether the layoffs and store closures had an impact on their fourth-quarter earnings.
Neri Karra Sillaman, a fashion retail and strategy expert with the University of Oxford’s Saïd Business School, said she thinks Kohl’s “real issue” is a “lack of identity and muddled strategy of the company.” Other department store chains including J.C. Penney’s have had an uphill battle remaining relevant in today’s retail environment.
“They are caught between two worlds—trying to appeal to value-conscious shoppers while also maintaining a department store feel,” Sillaman told Fortune. “That’s a tough place to be right now.”
Outlook for Kohl’s in 2025
Consumers have been cutting back on buying non-essentials in an inflationary environment, but when they do spend, they’re looking for low prices at places like Walmart or a “very unique experience,” Sillaman explained. And Kohl’s isn’t offering enough of either, she argued.
Kohl’s CEO Ashley Buchanan recognized this downfall during the company’s fourth-quarter earnings call Tuesday.
“Over the past few years, we have implemented a significant amount of change across our assortment, value strategies, and store experience in an effort to attract new customers,” said Buchanan, who was just installed as Kohl’s CEO in January. “While the intention of this strategy to engage a new customer has been important, it has also caused friction with our core customer.”
But according to Kohl’s 2025 outlook, the company is committed to complete its rollout of its Sephora partnership, enhance its online-shopping experience, and improve in-store shopping by adding more impulse queuing fixtures—i.e. shelves right at cash registers with enticing products.
“Our goal is to offer quality products at great prices across our entire brand portfolio so our customers can more clearly see the value they’re getting with their purchase,” Buchanan said during the earnings call.
Sillman said focusing on what makes Kohl’s unique should be the company’s top priority for 2025. Kohl’s should also “define what they stand for: Is it a destination for affordable, stylish fashion? A home goods leader? Right now, all of this is very unclear,” Sillaman said.
“The challenge is not just foot traffic—it’s getting customers to feel like Kohl’s is a place worth returning to, not just a stop along the way.”
