Department store chain Kohl’s has reported net sales of $3.7 billion for the second quarter ended July 29, down 4.8 per cent year on year, with profits plummeting 53 per cent to $58 million. 

Operating income for the period was down to $163 million from $266 million last year.

“Our second-quarter earnings were in line with our expectations,” said Tom Kingsbury, CEO at Kohl’s. “Many of our strategic efforts are just underway, which we expect will contribute incrementally in the back half of the year, and even more so in 2024 and beyond.” 

However, Neil Saunders, MD of GlobalData, said Kohl’s numbers do not “paint a pretty picture” and provide another piece of evidence that a consumer slowdown is underway.  

“The magnitude of the sales decline is not too shocking, but they come off the back of a very weak prior year when sales also fell,” Saunders said. 

“To be fair to management, the reinvention plans are at an early stage, and it would not be reasonable to expect their efforts to bear an abundance of fruit – especially on the sales side. They are also being hampered by the consumer slowdown which is affecting the more constrained and price sensitive Kohl’s shoppers more than most.”

Kohl’s inventory stood at $3.5 billion, a decrease of 14 per cent compared to last year. The company recently opened an additional 200 Sephora stores at Kohl’s shops. 

Saunders said the management is in control of the business but good operational control provides only the foundation for success. 

“It needs to be accompanied by a strong sales performance. On this front, we still find Kohl’s wanting,” he added.