Department store chain Kohl’s (KSS) - Get Report on Tuesday reported a fiscal first-quarter loss that was wider than analysts’ forecasts as the coronavirus pandemic and lockdown took an even deeper toll than expected.
Kohl's posted an adjusted loss of $495 million, or $3.20 a share, for the quarter ended May 2, vs. earnings of $98 million or 61 cents a share, in the year-ago quarter. Sales for the quarter totaled $2.4 billion, almost half of the $4.1 billion it brought in a year ago.
Analysts polled by FactSet were expecting a loss of $1.60 a share on sales of $2.5 billion.
With the U.S. economy all but closed from mid-March, all brick-and-mortar retailers are facing stunning first-quarter losses. J.C. Penney (JCP) - Get Report was the most recent victim, filing for bankruptcy protection late last Friday.
Collegiate prep style retailer J.Crew filed for bankruptcy less than two weeks ago, followed a few days later by Neiman Marcus Group.
Retailers like Kohl's were already facing competition from the likes of Amazon.com (AMZN) - Get Report before the pandemic forced closures and led to a massive drop in consumer demand for non-essential goods like clothing and accessories, their bread and butter.
Menomonee Falls, Wis.-based Kohl's is looking to rebound, however, with the company recently reopening about 50% of its stores across the country, CEO Michelle Gass said.
“As we look ahead, we know this experience will have a lasting impact to customer behavior and the retail landscape, and we are evolving our strategies to ensure our relevance and to capture market share,” she said.
Kohl's also said it was cutting inventories, reduced expenses across the board, including marketing, technology, operations and payroll costs, and plans to cut capital expenditures by approximately $500 million.
The company has also frozen its share buyback program, suspended its quarterly cash dividend beginning in the second quarter of 2020, replaced and upsized its revolving $1.5 billion secure line of credit and issued $600 million in notes due in 2025.
Shares of Kohl's were down 6.85% at $17.53 in trading on Tuesday.