American retailer Kohl's Q1 sees progress despite 4.1% sales decline
American omnichannel retailer Kohl's, in the first quarter (Q1) of fiscal 2025 (FY25) ended May 3, has reported net sales of $3 billion, marking a year-over-year (YoY) decline of 4.1 per cent, with comparable sales down 3.9 per cent.
The gross margin improved by 37 basis points (bps) to 39.9 per cent of net sales, and selling, general and administrative (SG&A) expenses fell by 5.2 per cent to $1.2 billion, representing 36 per cent of total revenue—down 32 bps YoY.
Kohl's has reported net sales of $3 billion in Q1 FY25, down 4.1 per cent YoY, with comparable sales down 3.9 per cent. Operating income rose to $60 million, while net loss narrowed to $15 million. Gross margin improved to 39.9 per cent and SG&A expenses declined. CEO Bender expressed optimism as he assumed leadership. FY25 outlook includes a 5â€'7 per cent sales decline and capex of $400â€'$425 million.
The operating income rose to $60 million, compared to $43 million in the prior-year period, with the operating margin improving by 58 bps to 1.9 per cent.
The company reported a net loss of $15 million, or $0.13 per diluted share, compared to a net loss of $27 million, or $0.24 per diluted share, in Q1 FY24. Inventory levels stood at $3.1 billion, a 2 per cent increase from the previous year, while operating cash flow recorded an outflow of $92 million, Kohl's said in a press statement.
'Our first quarter performance was ahead of our expectations and the actions we are taking are starting to make progress with early signs of a positive impact. Our team is focused and motivated to deliver great products, great value, and a great shopping experience to our customers. I want to thank our amazing team of associates for their hard work and dedication,' said Michael Bender, Kohl's interim chief executive officer (CEO).
'I am honoured to assume the role of interim CEO at such an important time for our company. Kohl's has a tremendous opportunity to build on our strong foundation of over 1,100 conveniently located stores and a large and loyal customer base,' added Bender on assuming his new role as CEO. 'I am excited to lead this next chapter of Kohl's and build on the momentum we have begun to generate.'
For FY25, Kohl's expects net sales to decline by 5–7 per cent and comparable sales to fall by 4–6 per cent. The operating margin is projected between 2.2–2.6 per cent, with diluted EPS in the range of $0.1 to $0.6. Capital expenditures (capex) are estimated at $400–$425 million.
Fibre2Fashion News Desk (SG)
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