(Reuters) – Kohl’s surprise CEO departure announcement a day before its quarterly results will play on the minds of investors, who were looking out for a positive forecast from the struggling department store chain ahead of the key holiday shopping season. The retailer said on Monday CEO Tom Kingsbury will step down after less than […]
Business
Kohl’s surprise CEO departure to amplify woes ahead of holiday shopping season
Audio By Carbonatix
(Reuters) – Kohl’s surprise CEO departure announcement a day before its quarterly results will play on the minds of investors, who were looking out for a positive forecast from the struggling department store chain ahead of the key holiday shopping season.
The retailer said on Monday CEO Tom Kingsbury will step down after less than two years at the helm, and appointed Walmart executive Ashley Buchanan to take on the role as it seeks to turn around its business.
The department store chain, which is expected to report third-quarter results before markets open on Tuesday, has been struggling to draw customers from different income groups to its stores as they hunt for bargains while spending on trendier products.
“While we heard from many retailers last week about quarter to date accelerations, we don’t think an abrupt CEO departure is a strong sign of confidence the night before earnings and four days before Black Friday,” Evercore ISI analyst Michael Binetti said.
The announcement “casts a meaningful shadow” on Kohl’s, Binetti added.
The company’s management shakeup adds to the uncertainty surrounding the industry as it closes in on the holiday shopping season, which usually accounts for a bulk of the annual sales for retailers.
On Monday Kohl’s peer, Macy’s, said it would delay third-quarter results after finding that an employee hid as much as $154 million in expenses over years, and issued preliminary sales figures that missed expectations.
The surprise announcements from the department store chains could signal that the holiday season would likely favor discount-heavy retail giants Walmart and Amazon over specialty chains.
Data compiled by LSEG showed that Kohl’s is expected to post its eleventh straight quarter of sales decline and net income that is estimated to nearly halve.
Kohl’s stock has fallen about 36% this year.
(Reporting by Aishwarya Venugopal in Bengaluru; Editing by Saumyadeb Chakrabarty)