Kohl’s is searching for a new chief executive following the resignation of Michelle Gass.
Kohl’s Corp. reported declines in third-quarter sales and profits and withdrew its guidance for the year as it deals with market volatility, investor pressure and the upcoming departure of its CEO.
“Given the recent volatility in business trends, the significant macroeconomic headwinds, along with the unexpected CEO transition, the company will not be providing guidance for the fourth quarter, and therefore is withdrawing its prior full year 2022 guidance,” Kohl’s stated.
The retailer has been under pressure from activist investors Acora Holdings and Macellum Advisors for leadership changes. Earlier this month, Kohl’s said CEO Michelle Gass planned to leave in December. Gass is joining Levi Strauss & Co. as part of a succession plan to succeed CEO Chip Bergh. Kohl’s board member Tom Kingsbury will serve as interim chief while the company searches for a permanent replacement.
“The Kohl’s Board is focused on supporting the management team during this CEO transition period, as well as the board’s search committee in its pursuit of finding the next CEO to lead Kohl’s,” stated Peter Boneparth, independent board chair, in the company’s earnings release.
Kohl’s net income fell to $97 million, or $0.82 a share, for the quarter ended Oct. 29, from $243 million, or $1.65 a share, in the year-ago period. Adjusted earnings were $0. 82 cents per share, beating analysts’ estimates of $0.77 per share.
Net sales fell 7.2% to $4.28 billion, beating estimates of $4.07 billion. Same-store sales decreased 6.9%, beat expectations of a 7.0% decline.
“We look forward to partnering with interim CEO Tom Kingsbury and the entire leadership team to execute at the highest level this holiday season, while also capitalizing on opportunities to strengthen the business,” Boneparth said. “Kohl’s is a great company with extremely bright prospects and I am confident we will find the right candidate to successfully position Kohl’s to drive sales, grow earnings and create shareholder value.”