Kohl's says key sales measure fell in 3Q, annual profit will be at low end of forecast

MarketsAssociated Press

Shares of Kohl's skidded Tuesday after the department store operator said sales weakened in October and its profit for the year will be at the low end of its forecast.

After the market closed on Monday, Kohl's predicted that sales at stores open at least a year dropped 1.4 percent in the third quarter, which runs through October. The measure is considered a key measurement of retailer health because it leaves out results from stores that have opened or closed within the last year, which can skew trends.

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For Kohl's, sales in the home and women's departments were particularly weak, and sales also dropped in the accessories, shoes and men's categories.

The company has forecast an annual profit of $4.05 to $4.45 per share and now expects to come in at the low end of that range. Analysts had expected net income of $4.27 per share on average, according to FactSet.

Jefferies & Co. analyst Daniel Binder said the warm weather hurt sales of seasonal clothing, but Kohl's management is expecting better results during the holiday period. He kept a "Buy" rating on the stock with a price target of $66 per share.

Shares of Kohl Corp.'s dropped $4.34, or 7.4 percent, to $54.21 in late morning trading.