Kohl's cuts annual forecasts as inflation squeezes demand

US department store chain now expects fiscal 2022 net sales to fall between 5% and 6%

Kohl's Corp. cut its full-year sales and profit forecasts on Thursday, squeezed by steeper discounts and higher costs amid dwindling demand for clothing and shoes in the face of high inflation.

Shares in the Menomonee Falls, Wisconsin-based retailer slumped 10% in premarket trading.

Decades-high inflation, although now easing, has made Americans more wary of opening their wallets to clothing, shoes and other non-essentials, pressuring demand at retailers and leaving them with bloated inventories.

While a return to offices and social events coupled with a resilient high-income consumer have buoyed sales of dressy, high-end fashion, Kohl's, which leans toward more casual styles and caters to low-income customers, is taking a bigger hit.

Ticker Security Last Change Change %
KSS KOHL'S CORP. 33.14 -1.40 -4.05%

The U.S. department store chain now expects fiscal 2022 net sales to fall between 5% and 6%, compared with its previous forecast of flat to 1% growth.

The Kohl’s label is seen on a shopping basket in a Kohl’s department store in the Brooklyn borough of New York, U.S., January 25, 2022. (Reuters/Brendan McDermid)

TARGET PROFIT SLUMPS AS DISCOUNTS FAIL TO SPUR SPENDING BY INFLATION-WEARY CONSUMERS

The company said it expects 2022 earnings per share of $2.80 to $3.20, compared with its previous forecast of $6.45 to $6.85. Analysts on average expect a profit of $4.06 per share, according to Refinitiv data.