Kohl's on Wednesday missed Wall Street estimates for second-quarter sales as muted spending on women's clothing and skincare products offset gains from the department-store chain's push to revitalize the business.
The company's shares, which had already fallen about 13% so far this year, dipped in volatile morning trading before paring back losses.
Despite growth in categories including home goods and youth apparel, CEO Michael Bender said that "we know there is more work to be done" to attract cash-strapped shoppers.
"We are operating in a challenging macroeconomic environment where our customers are experiencing persistent financial pressures from inflation in their everyday expenses like gas and food," Bender said in a post-earnings call. "We're bringing value everywhere we can."
Average transaction values declined slightly in the second quarter as low- and middle-income shoppers seek bargains, the company said.
U.S. consumer sentiment deteriorated in August and retail sales fell for the first time in nine months in July, underscoring an increasingly "selective" shopping trend among middle- and lower-income households, even as wealthier shoppers remain resilient.
Consumer caution around non-essential purchases has hurt retailers from Kohl's to off-price store operators like TJX TJX.N.
Kohl's named Bender permanent CEO last November to boost the business after years of shrinking profit and loss of ground to Amazon and off-price competitors, including Ross Stores ROST.O.
The retailer reported quarterly revenue of $3.32 billion, compared with analysts' estimate of $3.35 billion, according to data compiled by LSEG.
Its comparable sales fell 0.9% after dropping 4.2% a year ago.
"The fact that comparable sales remain in decline – the eighteenth consecutive quarter when they have dipped – does not convince us that Kohl's is a business in full recovery," said Neil Saunders, managing director of GlobalData, adding that Kohl's is still losing market share across major categories.
KSS•
