Kohl’s Corp’s sales tumbled 40.6 percent in the first quarter to $2.43 billion against $4.09 billion a year ago. Revenues were just below Wall Street’s consensus estimate of $2.453 billion. Same-store sales were down 43.5 percent against a decline of 3.3 percent a year ago.

On a reported basis, the net loss came to $541 million, or $3.50 a share, against net earnings of $62 million, or 38 cents, a year ago.

On a non-GAAP basis, the net loss was $495 million, or $3.20 a share, against earnings of $98 million, or 61 cents, a year ago. Non-GAAP results exclude impairments, store closing, and other costs. Non-GAAP results were well below Wall Street consensus estimates calling for a loss of $1.67 a share.

The operating loss came to $718 million against operating profits of $118 million a year ago.

Gross margins eroded to 17.3 percent from 36.8 percent a  year ago. SG&A expenses were reduced 16.4 percent to $1.07 billion from $1.28 billion a year ago while expanding to 43.9 percent of sales from 31.2 percent a year ago.

“We entered the year in a strong financial position and our business was tracking to our expectations prior to the onset of the crisis. We immediately responded with actions to protect the health and safety of our associates and customers and to preserve our financial position. I am incredibly proud of how our associates stepped up to face this unprecedented challenge with speed and agility. Our actions to manage cash outflow and increase liquidity have been instrumental in enhancing our position to navigate this crisis, and we believe our history of prudent capital management will continue to serve us well,” said Michelle Gass, Kohl’s chief executive officer.

“We have begun the rebuilding process, recently reopening about 50 percent of our stores across the country. In doing so, we have taken special care to equip our stores with the latest health and safety measures as we welcome back our associates and customers,” said Gass. “As we look ahead, we know this experience will have a lasting impact to customer behavior and the retail landscape, and we are evolving our strategies to ensure our relevance and to capture market share.”

Actions Taken In Response to COVID-19
As part of the COVID-19 response, the Company has taken the following actions to preserve financial liquidity and financial flexibility:

  • Managed inventory receipts meaningfully lower;
  • Significantly reduced expenses across the business inclusive of marketing, technology, operations, and payroll;
  • Decreased planned capital expenditures by approximately $500 million;
  • Suspended share repurchase program;
  • Suspended regular quarterly cash dividend beginning in the second quarter of 2020;
  • Replaced and upsized revolver to $1.5 billion secured facilities; and
  • Issued $600 million notes due 2025.

Photo courtesy Kohl’s