Investors Punish Kohl's Stock For Failing To Deliver Expected Results

Kohl's Corporation KSS announced results for the first quarter clearly disappointed investors. Its earnings, as well as revenue came in below the expected levels. That was enough for the market to drag down the stock over 7 percent in the pre-market trading on Thursday.

The results come on the heels of another retailer, Macy's Inc. M reporting a similar fashion of results on Wednesday.

Kohl's net income plunged 87 percent to $17 million in the first quarter from $127 million while earnings plummeted 86 percent to $0.17 a share from $0.63 a share in the year-ago quarter. Excluding items, its net income would have dropped 55% to $58 million from $127 million while earnings would have fallen 50 percent to $0.31 a share from $0.63 a share in the corresponding period of the last year.

The company's sales fell 3.7 percent to $3.97 billion from $4.12 billion in the previous year quarter. Both earnings and revenue fell short of analysts' expectations of $0.37 a share and $4.13 billion. Its comparable store sales fell 3.9 percent whereas it recorded a gain of 1.4 percent in the preceding year period.

Kohl's Chairman, CEO and President, Kevin Mansell, said, "First quarter sales were challenging. Despite the sales environment, we were able to manage our gross margin and inventory levels consistent with our expectations as we took the markdowns necessary to clear excess inventory. We managed our expenses effectively throughout the quarter as every area contributed to our savings versus our plan."

On May 11, the company's board declared a quarterly cash dividend of $0.50 per share. The dividend is payable on June 22, 2016 to shareholders of record date on June 8, 2016.