US-based department store chain Kohl’s has updated its full-year financial outlook for 2022 and reduced its sales forecast after higher inflation reduced demand for apparel and other goods.
The company now expects its net sales for the year to drop by 5-6% from the previous year.
Its earnings per share (EPS) are expected to remain at between $2.80 and $3.20, compared with the previous guidance of $6.45 to $6.85.
In the second quarter (Q2) of the year, which ended on 30 July, Kohl’s revenue amounted to $4.09bn. The figure represented an 8.1% decline from $4.45bn in the same period of last year.
The company’s adjusted net income also dropped to $143m from $382m in Q2 2021, while its quarterly diluted EPS fell from $2.48 to $1.11 on a year-over-year basis.
During the quarter, its net sales decreased by 8.5% and its same-store sales fell by 7.7%.
Kohl’s CEO Michelle Gass said: “Second-quarter results were impacted by a weakening macro environment, high inflation and dampened consumer spending, which especially pressured our middle-income customers.
“We have adjusted our plans, implementing actions to reduce inventory and lower expenses to account for a softer demand outlook.
“Kohl’s has navigated difficult periods in the past and I am confident in our ability to successfully manage through the current uncertainty.”
Kohl’s has also entered an expedited share repurchase agreement to buy back around $500m of its common stock.
In addition, the company and beauty retailer Sephora have announced plans to add a Sephora unit at all of Kohl’s store locations.
Kohl’s expects Sephora at Kohl’s to achieve $2bn in annual sales by 2025.
Earlier this year, Kohl’s and retail giant Walmart agreed to pay a collective fine of $5.5m after being found to have made misleading claims about their bamboo products.