The company on Tuesday said sales at stores open at least a year grew anemic 0.4% over the past quarter. Kohl's profit dropped 24% during the quarter compared to a year ago, and retailers cut prospects for a holiday shopping holiday. This is the second time Kohl has cut its forecast this year.
CEO Michelle Gass tried to give the best results. "We are entering the holiday period with momentum," he said in a prepared statement.
That is not little to defuse investors. Kohl (KSS) The stock fell on Tuesday. The stock fell as much as 17% during the beginning of trading. Macy's (M.) and Nordstrom (JWN) also fell. The two chains report earnings this weekend.
The results indicate that Kohl's makeover strategy failed.
Despite Kohl's efforts to transform himself to adapt to major changes in the retail industry, the company still cannot avoid intense pressure on department stores Amazon (AMZN), online brands, big box retailers, and discount chains like TJMaxx. Since 2011, Kohl has lost 17% of its market share, according to UBS estimates earlier this year.
And TJX (TJX), which includes TJMaxx and Marshalls, said Tuesday that sales at stores open at least a year increased 4% in the last quarter. The company has improved its guidelines for the rest of the year.
Gass, Kohl's CEO, has taken a proactive approach to rebuilding more than 1,150 retail stores for the online shopping era. Many analysts consider Kohl to be in a better position than the Macy, JCPenney and other malls because the majority of Kohl's stores are far from the mall.
Kohl's has partnered with Amazon to offer free returns for customers in stores. Gass said earlier this year that Amazon's launch into all of its stores was the company's "biggest single initiative" this year.
It also shrunk the size of some shops and rented out extra space to companies like Aldi and Planet Fitness (PLNT). It also tests concepts such as "clothing bars" for drawing Millennials. The clothing bar allows women to shop by "looking for" work and social events – in one place.
But to survive, Kohl might need to become bigger.