KSS Kohls Corporation

By Aisha Al-Muslim and Micah Maidenberg 

Sales at Kohl's Corp. and J.C. Penney Co. weakened in the latest quarter as the retailers experienced a slower start to the year.

For the first quarter, Kohl's said comparable sales fell 3.4%, while comparable sales at Penney dropped 5.5%. Both retailers missed analysts' expectations for the quarter, which ended on May 4.

Net sales for Kohl's slid 3.3% to $3.82 billion, lower than the retailer and analysts were expecting. The Menomonee Falls, Wis., company's total revenue was $4.09 billion, a 2.9% decline.

Meanwhile, Penney said its decision in February to stop selling major appliances as well as furniture in its stores hurt results. That move helped to lower its comparable sales in the latest quarter, the retailer said.

Penney's loss for the first quarter nearly doubled from a year ago to $154 million, or 48 cents a share. After adjustments, Penney's loss was 46 cents a share, seven cents worse than what analysts polled by FactSet predicted.

Total net sales for Penney dropped about 6% to $2.44 billion, within the range of analysts' prediction of $2.48 billion. Its top-performing categories in the quarter were jewelry and apparel for children, women and men.

Kohl's stock fell 9.3% in pre-market trading on Tuesday, while Penney dropped 8.7%.

Penney, based in Plano, Texas, has been hiring executives to carry out its turnaround plan, and on Tuesday it said it brought in a chief customer officer who will join the firm from grocery chain Sprouts Farmers Market. The company has been cutting inventories and testing strategies to determine optimal inventory levels.

Last week, Walmart Inc. said its sales at U.S. stores and websites grew 3.4% in the first quarter as the retail behemoth grabs market share from struggling competitors and grows online.

Macy's also reported last week slightly better-than-expected comparable sales in the latest quarter, up 0.6%. Macy's also affirmed its sales for the current fiscal year, saying it expects net sales to be roughly flat from the previous fiscal year, with comparable sales to be flat to up 1%.

For the recent quarter, Kohl's reported a profit of $62 million, or 38 cents a share, down from $75 million, or 45 cents a share, a year earlier. Excluding impairments, store closing and other costs, adjusted earnings were 61 cents a share, above the 56 cents a share analysts polled by Refinitiv were looking for.

For the current fiscal year, Kohl's now expects adjusted earnings per share of $5.15 to $5.45, lower than its prior guidance of $5.80 to $6.15. The company had previously said it expects comparable sales of no change to a 2% increase.

Kohl's Chief Executive Michelle Gass said in prepared remarks that the company has initiatives in place to improve sales in the second half of the year. Mr. Gass also said that Kohl's planned nationwide rollout of the Amazon.com Inc. returns program could help the company grow sales, transactions and customers.

Write to Aisha Al-Muslim at aisha.al-muslim@wsj.com and Micah Maidenberg at micah.maidenberg@wsj.com

(END) Dow Jones Newswires

May 21, 2019 09:09 ET (13:09 GMT)

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