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Investing.com -- Kohl’s Corp. announced Wednesday it has terminated CEO Ashley Buchanan for cause following a board-led investigation into undisclosed conflicts of interest tied to vendor transactions. Michael Bender, board chair since May 2024, was named interim CEO, effective immediately. Kohl’s (NYSE:KSS) stock has gained 6.7% following the announcement, signaling investor confidence in the CEO change.
The company said the findings did not involve other employees and were unrelated to Kohl’s performance, financial reporting, or operations. “Mr. Buchanan’s termination is unrelated to the Company’s performance,” Kohl’s said in a statement, noting his nomination to the board has also been withdrawn.
The board cited confidence in Bender’s leadership as Kohl’s navigates ongoing operational challenges. “Michael brings over three decades of leadership experience,” said board member John Schlifske, highlighting his former executive roles at Walmart (NYSE:WMT), Eyemart Express, and PepsiCo (NASDAQ:PEP).
Bender, a director since 2019, will step down from all board committee roles while serving as CEO. The company said it will begin a formal CEO search and retain a search firm to identify a permanent successor.
Kohl’s also issued downbeat preliminary results for the first quarter of fiscal 2025, including a comparable sales decline of between 4.3% and 4.0%, and expected diluted EPS between negative $0.24 and $0.20. Operating income is projected between $40 million and $45 million.
The leadership upheaval comes amid a prolonged sales decline and waning investor confidence. Comparable sales dropped 6.5% in 2024, and net sales fell 7.2% year over year to $16.2 billion.
While recent years brought some margin gains and inventory control, the company continues to struggle with sagging apparel and footwear sales. Initiatives like the Sephora partnership, home décor expansion, and Babies “R” Us shop-in-shops have shown promise but haven’t offset losses.
Bender said in a statement, “We will continue to build on this foundation as we enhance the value we deliver to our customers and set the stage for meaningful operational and financial progress.” The company operates over 1,100 stores and serves more than 60 million customers.
Kohl’s will report its full Q1 2025 earnings on May 29. Analysts and investors will be closely watching for signals of strategic overhaul following a major leadership shake-up and persistent sales pressure.