(Reuters) – Kohl’s Corp cut its full-year sales and profit forecasts on Thursday, squeezed by steeper discounts and higher costs amid dwindling demand for clothing and shoes in the face of high inflation.
Shares in the Menomonee Falls, Wisconsin-based retailer slumped 10% in premarket trading.
Decades-high inflation, although now easing, has made Americans more wary of opening their wallets to clothing, shoes and other non-essentials, pressuring demand at retailers and leaving them with bloated inventories.
While a return to offices and social events coupled with a resilient high-income consumer have buoyed sales of dressy, high-end fashion, Kohl’s, which leans toward more casual styles and caters to low-income customers, is taking a bigger hit.
The U.S. department store chain now expects fiscal 2022 net sales to fall between 5% and 6%, compared with its previous forecast of flat to 1% growth.
The company said it expects 2022 earnings per share of $2.80 to $3.20, compared with its previous forecast of $6.45 to $6.85. Analysts on average expect a profit of $4.06 per share, according to Refinitiv data.
(Reporting by Deborah Sophia in Bengaluru; Editing by Krishna Chandra Eluri)
