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The choosy US retail customer still doesn\u2019t want what Kohl\u2019s Corp. is trying to sell.<\/p>\n
The midmarket department-store chain slashed its guidance for the full year after reporting first-quarter results that wildly missed on just about every metric. Comparable sales, which measure the performance of stores open at least one year, fell 4.4% in the quarter ended May 4 \u2014 the ninth consecutive decline. Analysts had expected a 1.7% drop.<\/p>\n
Although Kohl\u2019s offered deep discounts in the period, the company said<\/a><\/p>\n sales of clearance items actually declined, leading to the miss on comparable sales. On the company\u2019s website Thursday, it was hawking sales of as much as 85% off.<\/p>\n The stock tumbled as much as 27% in New York trading, the most on record. The shares had declined 5% this year through Wednesday, compared with a 9.7% gain for the Russell 1000 Index.<\/p>\n \u201cOur customers continue to be pressured by a number of economic factors, including high interest rates and inflation,\u201d Chief Executive Officer Tom Kingsbury said on a conference call. \u201cWhile spending among our high-income customers has remained steady, our middle-income customer continues to be impacted.\u201d<\/p>\n The Menomonee Falls, Wisconsin-based retail chain has been introducing tie-ups with other brands to bring customers in, most notably with cosmetics chain Sephora<\/a>. Though Kohl\u2019s cited strong growth in Sephora traffic, it doesn\u2019t look to be translating into many sales outside the store-in-store locations.<\/p>\n The company, which brought on board member Kingsbury as CEO in February 2023 after a lengthy search, said the quarter\u2019s results \u201cdid not meet our expectations and are not reflective of the direction we are heading with our strategic initiatives.\u201d<\/p>\n Thursday\u2019s retail results reinforce that inflation-weary consumers are seeking value, and being picky about what that means to them.<\/p>\n Foot Locker<\/a> Inc. soared as much as 32%, the most on record, after saying profit far exceeded analysts\u2019 estimates. Still, CEO Mary Dillon struck a cautious note in an interview.<\/p>\n \u201cThere\u2019s still pressure on the consumer for us \u2014 exposure to inflation, interest rates and reduced savings,\u201d Dillon said. \u201cBut it\u2019s discretionary for a reason. They decide where to spend it.\u201d<\/p>\n Dollar General<\/a> Inc., in the midst of turnaround efforts under two-time CEO Todd Vasos, said Thursday that gains in traffic and market share drove sales growth<\/a><\/p>\n , though shoppers are spending less per transaction on average. Consumable products are growing, but more discretionary items such as apparel, seasonal and home products are declining.<\/p>\n \u201cThey continue to be very value-oriented in their shopping behavior,\u201d Vasos said of consumers on a conference call, adding that there\u2019s higher demand for private-label products and items at or below $1.<\/p>\n Best Buy<\/a> Co., the last big US electronics chain, is all about discretionary items \u2014 and comparable sales slumped 6.1% in its most recent quarter, missing estimates. Still, the company outperformed on profit<\/a> thanks to membership and service offerings.<\/p>\n \u201cCustomers remain very deal-focused and attracted to more predictable sales moments,\u201d CEO Corie Barry said on a call with analysts. The broader environment was more discount-heavy than expected, she said, though it varied by categories. Appliances were more promotional during the first quarter.<\/p>\n Discount chain Burlington Stores Inc.<\/a> surged as much as 21% in New York trading, the most since November, after reporting<\/a> comparable sales and earnings that topped estimates. The company also raised its full-year guidance. \u201cThe quarter got off to a slow start in February, likely due to disruptive weather and delayed tax refunds, but then our sales trend picked up,\u201d CEO Michael O\u2019Sullivan said in a statement<\/a>.<\/p>\n \u2014 With assistance from Jaewon Kang and Kim Bhasin<\/p>\n<\/div>\n