Kohl’s hopes his holiday plan will pan out after years of declining sales

At Kohl’s Corp. The holiday season has already begun as the company prepares for its busiest period of the year and hopes some changes will help attract more shoppers.

“We think we have a good strategy, we think we have a good product mix, we have a good value strategy that we want to deliver,” said Fred Hand, Kohl’s senior executive vice president and director of stores. . “We just want to make sure that what we do is consistent with the experience the customer is having both digitally and in-store.”

It comes as the Menomonee Falls-based department store chain tries to divest continued decline in same-store sales.

More: Kolya is “disappointed” with sales in the second quarter and reduces forecasts for the rest of the year

The company did a few changes in the months before the holiday season:

There are 100 Babies ‘R’ Us stores open and plans to add 100 more by the end of the year.
Expanded gift options
Returned the jewelry.
We moved the junior department closer to Sephora.
Expanded selection of dresses and business attire for women.

And most recently, Kohl’s is expanding its home decor options.

“It’s not just about gifting, but getting ready for the holiday season from a home improvement standpoint is a big area of opportunity and something we’ve been pushing really hard this year,” said Nick Jones, Kohl’s chief merchandising officer. .

As higher prices impact customers, the company also plans to lean heavily on its most popular feature, Kohl’s Cash.

“This is a great way to stretch your holiday (shopping) budget,” said Christy Raymond, Kohl’s chief marketing officer. “You can earn Kohl’s Cash the first time you make a purchase, but then use it to buy additional gifts.”

Kohl’s executives hope the changes will attract more families to become repeat customers.

“We see ourselves as being in a great position to serve what families need across the entire store,” Jones said. “Our job is to get it done.”

Kohl’s sees continued decline in same-store sales

But to quote boxer Mike Tyson, everyone has a plan until they get punched in the face. And Kolya has been beaten up over the past few years.

“Kohl’s sales have been declining for 10 straight quarters,” said David Schwartz, senior equity analyst at Morningstar, who covers Kohl’s.

“Essentially, I don’t expect Kohl’s to ever return to significant sales growth,” Schwartz said. “That may be pessimistic, but the reality is, as I said, this is a company that has had negative sales performance quarter after quarter recently.” . It’s not that they didn’t try anything.”

Schwartz doesn’t think this holiday season will change the company’s fortunes. He believes Kohl’s will achieve positive sales growth in 2025, but in the low single digits.

One area where work is being done is that the company has “redressed the balance to some extent,” Schwartz said.

Kohl’s paid off the high-interest debt, he said. And with construction at all Sephora stores nearly complete, the company is cutting back on capital expenditures.

Meanwhile, its shares are “much undervalued,” Schwartz said.

Schwartz said the stock should be priced at about $48 per share. As of Friday’s close, Kohl’s stock was trading at $XX per share.

“The problem is that Kolya does not let the bodies through the door. They need to find a way to get people there,” Schwartz said. “Sephora is clearly a big effort. I don’t think Babies ‘R’ Us will have any major impact.”

Schwartz said Kohl’s partnerships with Sephora, Babies ‘R’ Us and Amazon to return packages “show Kohl’s weakness.”

“Its own brand is not strong enough to attract people to the stores,” Schwartz said. “If Kohl’s were ever successful in making their own beauty products, they wouldn’t need Sephora. And if Kohl’s sold baby clothes well, it wouldn’t need the Babies ‘R’ Us name.”