No Quick Fix for Kohl's: Analyst Highlights Challenges Despite Leadership Change

Telsey analyst Dana Telsey lowered the price forecast for Kohl’s Corporation KSS from $10 to $9, while retaining a Market Perform rating.

On Thursday, the company announced the termination of CEO Ashley Buchanan for cause and appointed Board Chair Michael Bender as Interim CEO.

Also, Kohl’s issued preliminary first-quarter 2025 results, expecting comparable sales to decline between 4.3% and 4.0%, operating income between $40 million and $45 million, and diluted EPS of a loss of 20 cents to a loss of 24 cents.

The analyst writes that the CEO position at Kohl’s appears to have been difficult to maintain since Michelle Gass’s departure in late 2022.

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The retailer has faced headwinds, experiencing market share losses over the last several years, even with positive developments like the introduction of Sephora shop-in-shops and Babies”R”Us, adds the analyst.

Telsey writes that Kohl’s has lost ground to off-price retailers, which offer a straightforward value proposition, and e-commerce platforms such as Amazon, due to their convenience and rapid delivery.

The analyst further says that despite the leadership change, Kohl’s anticipates continuing Buchanan’s strategies (curated assortment, value/quality, frictionless experience) under the interim CEO.

New leadership will likely focus on stabilization, but consumer recovery will take time, adds the analyst.

Investors can gain exposure to the stock via First Trust DJ Global Select Dividend FGD and Invesco Exchange-Traded Fund Trust II Invesco S&P SmallCap 600 Revenue ETF RWJ.

Price Action: KSS shares are up 4.37% at $7.53 at the last check Friday.

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