Kohl’s Comp Sales Drop 13.3 Pct As Pandemic Cuts Into Clothing, Footwear Sales

Kohl’s reported Tuesday (Nov. 17) that the pandemic has cut into its clothing and footwear sales, slashing comparable sales by 13.3 percent in Q3.

“The pandemic significantly impacted back-to-school sales and this weighed heavily on our sales performance in August. However, our sales trend nicely rebounded in September and October,” Kohl’s CEO Michelle Gass said on a call with analysts.

Still, Gass noted that the company was especially pleased with the ongoing formidable, positive growth in its home and toys businesses in addition to its performance in active and beauty.

“We are encouraged by these trends, given that these categories grow in importance over the holiday season, and they are a key part of our strategy going forward,” Gass said.

Gass said the company enters the holiday season well-positioned and prepared.

“Given the heightened role of digital this year, it will be more important for us to further drive awareness of our store and curbside pickup services,” Gass said.

Gass also noted that Ship from Store will also continue to be essential in supporting its omnichannel network. She said the company is more than doubling the number of stores carrying incremental inventory to fufill online orders during peak.

Gass noted that the company is operating “very safely” and that it expects that many customers will shop in its brick-and-mortar retail locations.

The executive said Kohl’s put extensive health and safety measures into place earlier in 2020 and has implemented further measures to ensure cleanliness and to support social distancing.

In terms of merchandise selection, Gass said the company entered the season with a compelling collection of items based on what shoppers want and in areas of strength for Kohl’s where it already has momentum. It is focusing on active, home, cozy and comfort and toys.

“We also expect to see more practical gifting and a continued focus on value this holiday, which Kohl’s is known for,” Gass said.

Gass also outlined a new strategic framework that has four key areas of focus. Those include driving top-line growth, expanding operating margin, disciplined capital management and an agile, accountable and inclusive culture, according to Gass.

As for its overall results, Kohl’s reported 1 cent in adjusted diluted earnings per share on $3.78 in net sales. The results exceeded analyst estimates of a loss per share of 43 cents on $3.86 billion in net sales.