Kohl’s net sales decreased 5.2% year-over-year from $4.05bn to $3.84bn with comparable sales down 5.5% in Q3.
Operating income was $157m compared to $200m in the prior year. While, net income was down to $59m compared to last year’s $97m.
Kohl’s store sales in the US’s Midwest, Mid-Atlantic, and Northeast regions, where the weather impact was most apparent, were down to the low to mid-single digits in Q3, while all other regions increased to low-single digits.
Kohl’s explained it has initiatives underway to “de-weather” the business as it focuses on growing sales in less weather-sensitive categories like beauty, home, gifting, and impulse.
Additionally, the retailer said that in 2023, it re-established its stores as a key focal point of strategy to capitalise on opportunities and drive sales in the local markets.
Kohl’s chief executive officer Tom Kingsbury believes store performance was driven by strong growth in Sephora and the newness in its home and gifting initiatives, reinforcing the fact the retailer’s actions are working and resonating with customers.
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However, he said the retailer achieved these results despite a “softer-than-expected” demand environment driven by “less-than-ideal” weather and persistent macroeconomic pressures on its customer.
Kingsbury continued: “Kohl’s third quarter earnings reflect strong gross margin and expense management as well as additional progress against our strategic priorities. Our strategies to reposition Kohl’s for improved sales and earnings performance remain in the early stages. The work we have done in 2023 will continue to build momentum and set us up to be successful in 2024. I continue to be impressed with the entire Kohl’s team for their hard work and agility in executing against our strategic priorities in 2023.”
On the company’s investor call the CEO told investors and the management that throughout 2023 Kohl’s focused on four strategic priorities, which are: enhancing the customer experience, accelerating and simplifying its value strategies, managing inventory and expenses with discipline, and further strengthening the balance sheet.
Kohl’s longer-term initiatives include enhancing the customer experience as the retailer noted this is a top priority that represents the largest growth opportunity.