Shares of department store chain Kohl's (KSS) - Get Report reversed course on Tuesday, falling nearly 5% on investors' expectations that the company will be facing stronger headwinds heading into the critical holiday shopping season.
Shares of Kohl's initially rose after the company reported second-quarter earnings lower than a year ago though still ahead of analysts' forecasts, amid its ongoing focus on cutting costs and changing its product lineup to entice customers to walk through its doors.
The company posted net income of $247 million, or $1.55 a share, vs. $292 million, or $1.76 a share, in the comparable year-earlier period. Analysts polled by FactSet had been expecting earnings of $1.53 a share.
Sales rang in at $4.43 billion for the quarter, down from $4.57 billion a year ago though ahead of analysts' forecasts of $4.31 billion. Comparable same-store sales dropped 2.9% vs. a gain of 3.1% in the same period last year.
"We are confident that our upcoming brand launches, program expansions, and increased traffic from the Amazon returns program will incrementally contribute to our performance during the balance of the year and beyond," CEO Michelle Gass said in a statement.
However, the stock reversed course following the company's conference call with analysts, where it provided a degree of caution for investors on its forward sales and earnings prospects - mainly due to the specter of tariffs affecting consumer demand, and by extension the company's margin forecasts.
The company affirmed its annual earnings guidance of $5.15 to $5.45 a share, which excludes 26 cents a share related to so-called impairments, store closings and other costs recognized in the first six months of 2019.
Shares of Kohl's were down 4.32%, or $2.08 a share, to $46.12 in trading on Tuesday. They ended the day Monday up nearly 6% at $48.20.
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