Kohl's cuts annual profit forecast after disappointing results; shares slump

[November 19, 2019]  (Reuters) - Kohl's Corp <KSS.N> cut its annual profit outlook on Tuesday ahead of the all-important holiday season, after the department store operator's quarterly comparable sales and earnings missed analysts' estimates, sending its shares down 12%.

The company's results come at a time when U.S. department stores are struggling with changing consumer preferences and a shift to online shopping, leading to the bankruptcies of Sears and luxury retailer Barneys New York.

As buyers increasingly shift online, Kohl's earlier this year partnered with Amazon.com Inc <AMZN.O>, allowing customers to return at its stores products bought on the online retailer's website.

The tie-up, through which Kohl's aims to attract more shoppers, has been extended to all its 1,000 outlets in the United States following a successful pilot.

The partnership could hurt Kohl's profit and gross margin, with no guarantee of purchases when a shopper visits a store to return the order, analysts have said.

Kohl's said it now expects full-year adjusted earnings to be between $4.75 and $4.95 per share, compared to its previous forecast of $5.15 to $5.45.

In the third quarter, sales from stores open for at least a year rose 0.40% , while analysts on average had expected same-store sales to increase 0.76%, according to IBES data from Refinitiv.

On an adjusted basis, the retailer earned 74 cents per share in the third quarter ended Nov. 2. Analysts were expecting a profit of 86 cents per share.

Net income fell to $123 million, or 78 cents per share, in the quarter, from $161 million, or 98 cents per share, a year earlier.

(Reporting by Nivedita Balu in Bengaluru; Editing by Shounak Dasgupta)

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