Kohl’s last year launched its “Greatness Agenda,” aimed at mixing up merchandise, bringing in more national brands, and boosting its loyalty program.
But that hasn’t translated to a major boost in sales; its quarterly report Thursday was a disappointment. Same-store sales were up .1% and profits fell 44% to $130 million. Accounting for debt pay downs, profit fell 9%.
The company said that forces working against back-to-school sales, including consumer reluctance to spend and a later Labor Day are a factor, but investors seem to be worried that problems run deeper than that.
Kohl’s has expanded from being a Midwestern retailer to a national one, amping up its number of stores in the last two decades. But the company is struggling to meet its growth targets.
The company has been in the fore-front of several omnichannel efforts, including in-store pickup, and is experimenting with an off-price outlet. When Juicy Couture announced it was closing stores and concentrating sales overseas, Kohl’s was there to be the brand’s U.S. retailer.
One problem for Kohl’s may be that shoppers are able to find ample discounts at department stores like Macy’s or treasure-hunt-oriented, off-price retailers like T.J. Maxx. Meanwhile, Target offers a designer approach at downscale prices. And Wal-Mart Stores, the world’s largest retailer, are ubiquitous, compared to Kohl’s 1,164 outposts nationwide.
The retailer may need to work harder than its rivals, at least for a while, to remind consumers of its national-brand offerings, on and offline, to achieve the kind of growth it expected by now.