Kohl’s Corporation (NYSE:KSS) shares tumbled to a 52-week low of $12.69, reflecting a challenging period for the retail sector. According to InvestingPro data, the stock’s RSI indicates oversold territory, while trading at an attractive P/E ratio of 5.7x and offering a substantial 15.75% dividend yield. The company, known for its department stores across the United States, has faced significant headwinds that have battered its stock price over the past year. Investors have watched with concern as Kohl’s stock has plummeted, marking a stark 1-year decline of 46.2%. Despite these challenges, InvestingPro analysis shows the company has maintained dividend payments for 14 consecutive years, though analysts project a 12% revenue decline this year. The steep drop underscores the broader issues facing brick-and-mortar retailers as they grapple with changing consumer habits and increased competition from online retailers.
In other recent news, Kohl’s Corporation announced a strategic decision to close 27 underperforming retail locations and its San Bernardino e-commerce fulfillment center by April and May 2025, respectively. This move is part of broader efficiency initiatives aimed at bolstering the long-term health of the business. Kohl’s estimates it will incur pre-tax charges ranging from $60 million to $80 million related to these actions. Despite a significant drop in earnings per share to $0.20 and a steep 9.3% decline in same-store sales, Kohl’s managed to increase its gross margin and saw a 15% rise in beauty sales through its partnership with Sephora.
Several analyst firms have adjusted their stance on Kohl’s following these developments. TD Cowen reduced the price target from $20.00 to $16.00, Telsey Advisory Group lowered it to $17 from $23, Guggenheim cut it to $25 from $26, Citi reduced it from $18 to $14, and Baird downgraded the stock from Outperform to Neutral, reducing the target from $25.00 to $18.00. These adjustments come in light of Kohl’s ongoing sales difficulties and operational challenges, despite the company’s initiatives to revitalize sales.
These are recent developments as Kohl’s navigates a period of strategic repositioning under new leadership, with the appointment of Ashley Buchanan as the new CEO slated for January 2025. Despite the overall downturn, Kohl’s sees growth opportunities in expanding product lines, including Babies R Us shops and fine jewelry.
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