Kohl's says 2 executives are leaving the company; retailer set to report earnings on Thursday
Kohl’s Corp., the national retailer based in Menomonee Falls that just went through a fight for control of the company, said late Wednesday in a filing with securities regulators that two of its top executives are leaving.
In the filing, which was posted on the U.S. Securities and Exchange Commission website, Kohl’s said that Doug Howe, the company’s chief merchandising officer, “is departing the company effective immediately.”
Also in the filing, the company said that Greg Revelle, chief marketing officer, “will be departing the company effective June 1, 2022.”
Additional details of the executive departures were not immediately available.
Kohl's told financial cable network CNBC that “a search for the replacements is already underway."
The filing comes less than 24 hours before Kohl’s is set to announce its quarterly earnings. The company is scheduled to announce earnings on Thursday prior to the opening of stock market trading.
The filing also comes as shares of Kohl's, along with other retail stocks, were pummeled in Wednesday trading after Target Corp. announced a disappointing earnings report.
Kohl's shares closed down Wednesday more than 10%, or $5.34 a share, to $43.13.
Inflation takes toll on retail earnings
The Dow Jones Industrial Average sank more than 1,100 points and the S&P 500 had its biggest drop in nearly two years Wednesday. The Nasdaq fell 4.7%.
Retailers were among the biggest decliners after Target plunged following the disappointing quarterly earnings report.
Target shares lost a quarter of their value after the retailer reported earnings that fell far short of analysts’ forecasts.
In a sign of the impact of inflation, particularly on shipping costs, Target said its operating margin for the first quarter was 5.3%. It had been expecting 8% or higher. Target warned that its costs for freight this year would be $1 billion higher than it estimated just three months ago.
The company also said consumers returned to more normal spending habits, switching away from TVs and appliances and buying more toys and travel-related items.
The Target earnings report came a day after Walmart said its profit took a hit from higher costs. Walmart, the nation’s largest retailer, fell 6.8% Wednesday, adding to its losses from Tuesday.
The weak reports stoked concerns that persistently rising inflation is putting a squeeze on businesses and could cut deeper into their profits.
“These retailers are having to balance how much of the higher inflation to pass on to consumers versus eating it," said Willie Delwiche, investment strategist at All Star Charts. "So that goes into questions about profitability on the part of companies and that gets to some of these lingering valuation questions for the market.”
Other big retailers also racked up hefty losses on Wednesday. Dollar Tree fell 14.4% and Dollar General slid 11.1%. Best Buy fell 10.5% and Amazon fell 7.2%.
Those declines were part of a dismal day on Wall Street. All told, more than 95% of stocks in the S&P 500 closed lower on Wednesday. The benchmark index is now down more than 18% from the record high it reached at the beginning of the year. That’s just shy of the 20% decline that’s considered a bear market.
Consumers are key to economy
Stocks have been struggling to pull out of a slump over the last six weeks as concerns pile up for investors. Any data on retailers and consumers is being closely monitored as investors try to determine the impact from inflation and whether it will prompt a slowdown in spending.
Despite the highest inflation in 40 years, consumers have thus far shown a continued willingness to spend, but concerns are growing that consumers may be cutting back.
Target and Walmart each provided anecdotal evidence that inflation is weighing on consumers, saying shoppers held back on purchasing big-ticket items and changed from national brands to less expensive store brands.
Consumer spending accounts for more than 70% of economic activity in the U.S.
The Federal Reserve is trying to temper the impact from inflation by raising interest rates. On Tuesday, Fed Chair Jerome Powell told a Wall Street Journal conference that the U.S. central bank will “have to consider moving more aggressively” if inflation fails to ease after earlier rate hikes.
The Associated Press contributed to this report.