Kohl’s Says On-Demand Products Fight Inflation

With its focus on on-demand products and middle-income consumers, kohl’s The retailer said during its quarterly earnings call on Thursday (November 17th) that it has been hit hard by current macroeconomic trends.

“Continuously high inflation continues to curb consumer spending and our business, given our exposure to discretionary categories that face disproportionate pressure, such as clothing and household goods,” said Kohl’s Chief Financial Officer. Jill Timm said during the call. “During the quarter, we saw our middle-income consumers continue to purchase fewer items per trip and are turning to our value-driven specialty brands.”

In the quarter ended Oct. 29, the company’s comparable sales fell 6.9% year-over-year and net sales 7.2%, Kohl’s said in a report. Press release.

Kohl’s said in a statement that the company will focus on value messaging and product innovation to meet customers’ new needs during the holiday season and beyond. presentation published with the call.

“Recognizing how important value is to customers this year, we are reinforcing our value message by highlighting our specialty brands more prominently in our marketing, as well as turning to our iconic Kohl’s Cash and Kohl’s Rewards programs through our holiday brand campaign and at key promotional events,” Timm said.

The retailer will also grow Sephora cosmetic stores to all their locations. Kohl plans to add 250 more of these in-store shop Concepts in 2023 bring the total to 850 while also revealing a version with a smaller footprint for the remaining locations of Kohl.

Sephora has been a bright spot for Kohl’s. The retailer said in its presentation that Sephora is attracting new, younger and more diverse customers who shop more often. During the call, Timm said Kohl’s locations with Sephora saw mid-to-high single-digit sales growth compared to locations with no stores.

Looking ahead, Kohl’s does not provide guidance and has retracted its previous outlook for the year. Executives attributed this to unpredictable consumer demand trends, macro headwinds and company contingencies. CEO transition after the former CEO’s announcement on Nov. michelle gas moved Levi Strauss.

“Given our expectation that the challenging environment will continue in the short term, we are taking action on multiple fronts to ensure we are in the best position,” Timm said. “We prudently plan inventory commitments, implement cost savings opportunities, and reduce capital expenditures. We will do this as we continue to invest in our key future growth initiatives.”

kohl’s shares It rose nearly 3% on Thursday morning shortly after the earnings call.

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