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Kohl’s Tumbles as Poor Holiday Sales Prompt Reduced Guidance

Shares of department store chain Kohl’s slide after the company discloses sales during the holiday shopping period fell short, particularly in women’s clothing.

Shares of clothing and accessories retailer Kohl’s (KSS)  tumbled on Thursday after the company disclosed that sales during the critical holiday shopping season were lower than the same period a year ago, particularly in women’s clothing.

In a regulatory filing, Kohl's said comparable-store sales for fiscal November and December 2019 combined decreased 0.2% from the same period last year - a surprise to analysts and investors, who had expected the company performed well over the holidays.

Based on that, Kohl’s said it now expects fiscal 2019 per-share earnings to be at the low end of its previously announced guidance range of $4.75 to $4.95. The guidance excludes 22 cents a share related to debt and impairment write-offs, store closings and other costs.

“We continue to see momentum in key areas including our digital business, active, beauty and children’s, and solid performance in footwear and men’s,” CEO Michelle Gass said. “This was offset by softness in women’s, which we are working with speed to address.”

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Analysts polled by FactSet were expecting full-year earnings of $4.88 a share. Kohl's is scheduled to announce fourth-quarter earnings on March 3. That will be followed by the company's 2020 Investor Day, to be held in New York on March 20.

The announcement follows several analyst downgrades of Kohl's in recent days, including Jefferies analyst Randal Konik, who this week cut his rating on the stock to hold from buy citing the prospect for disappointing comparable-store sales and declining profit margins. 

Konik also noted that the retailer's attempts to diversify from mall-based sales, via partnerships with Amazon  (AMZN)  , haven't translated into improved revenue or investment returns.

Shares of Kohl's were down 7.55%, or $3.73 a share, at $45.65 in morning trading on Thursday.

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