Kohl’s Corp. (KSS) and Dick’s Sporting Goods Inc. (DKS) added to growing concerns about the strength of U.S. consumer spending, with both retailers issuing disappointing financial guidance.
Kohl’s warned of a potential 6% drop in comparable sales for 2025, far exceeding Wall Street’s expectations, while Dick’s Sporting Goods forecasted earnings and sales growth that fell short of analyst estimates.
These reports add to a broader wave of caution spreading across the retail sector. Industry giants like Walmart Inc. (WMT), Abercrombie & Fitch Co. (ANF), Target Corp. (TGT), and Best Buy Co. (BBY) have all expressed concerns about macroeconomic uncertainty, exacerbated by ongoing trade tensions and shifting consumer behaviors.
These reports add to a broader wave of caution spreading across the retail sector. Industry giants like Walmart Inc. (WMT), Abercrombie & Fitch Co. (ANF), Target Corp. (TGT), and Best Buy Co. (BBY) have all expressed concerns about macroeconomic uncertainty, exacerbated by ongoing trade tensions and shifting consumer behaviors.
Kohl’s Faces Steep Declines Amid Turnaround Efforts
Kohl’s stock plummeted 16% in early trading following its latest earnings release, with shares hitting $10.09 as the S&P 500 slipped 0.4%. The company posted fourth-quarter diluted earnings of $0.43 per share and adjusted earnings of $0.95, surpassing the consensus estimate of $0.73 per share. However, net sales declined by 9.4% to $5.18 billion, aligning with Wall Street projections.
Despite an earnings beat, Kohl’s forward guidance disappointed investors. The retailer expects full-year sales to decline between 5% and 7%, while diluted earnings per share could range from $0.10 to $0.60—far below analyst projections of $1.22 per share.
CEO Ashley Buchanan, who took the helm in January, outlined a turnaround strategy focused on refining the in-store experience, enhancing the company’s value proposition, and optimizing its product offerings. Kohl’s has also taken steps to streamline operations, including a 10% reduction in corporate office roles. The company’s dividend cut—from $0.50 per share to $0.125 per share—further underscored the challenges ahead.
Market analysts remain skeptical about the timeline for Kohl’s recovery. Dana Telsey of Telsey Advisory Group noted that while new leadership could help stabilize the business, significant headwinds remain in the current economic climate. Some industry observers believe Kohl’s prolonged struggles may even make it a potential target for private equity buyouts.
Kohl’s stock plummeted 16% in early trading following its latest earnings release, with shares hitting $10.09 as the S&P 500 slipped 0.4%. The company posted fourth-quarter diluted earnings of $0.43 per share and adjusted earnings of $0.95, surpassing the consensus estimate of $0.73 per share. However, net sales declined by 9.4% to $5.18 billion, aligning with Wall Street projections.
Despite an earnings beat, Kohl’s forward guidance disappointed investors. The retailer expects full-year sales to decline between 5% and 7%, while diluted earnings per share could range from $0.10 to $0.60—far below analyst projections of $1.22 per share.
CEO Ashley Buchanan, who took the helm in January, outlined a turnaround strategy focused on refining the in-store experience, enhancing the company’s value proposition, and optimizing its product offerings. Kohl’s has also taken steps to streamline operations, including a 10% reduction in corporate office roles. The company’s dividend cut—from $0.50 per share to $0.125 per share—further underscored the challenges ahead.
Market analysts remain skeptical about the timeline for Kohl’s recovery. Dana Telsey of Telsey Advisory Group noted that while new leadership could help stabilize the business, significant headwinds remain in the current economic climate. Some industry observers believe Kohl’s prolonged struggles may even make it a potential target for private equity buyouts.
Dick’s Sporting Goods Braces for Uncertainty
Dick’s Sporting Goods also delivered mixed results, with fourth-quarter earnings of $3.62 per share exceeding Wall Street estimates of $3.52. The company reported net sales of $3.89 billion, beating the expected $3.77 billion. However, forward-looking guidance dampened investor enthusiasm, sending shares down 5.6% to $199.23.
For fiscal 2026, Dick’s expects earnings in the range of $13.80 to $14.40 per share, below analysts’ consensus forecast of $14.82. The company anticipates sales of $13.6 billion to $13.9 billion, with the midpoint of this range falling short of Wall Street’s projections. CEO Lauren Hobart cited macroeconomic uncertainty as a key factor influencing the company’s cautious outlook.
Dick’s has been actively investing in both its physical store network and e-commerce capabilities. While strong growth in its footwear segment contributed to recent sales gains, the company remains wary of potential headwinds, including the impact of tariffs on consumer pricing. Executive Chairman Ed Stack acknowledged that price increases tied to trade policies could put additional pressure on shoppers.
Dick’s Sporting Goods also delivered mixed results, with fourth-quarter earnings of $3.62 per share exceeding Wall Street estimates of $3.52. The company reported net sales of $3.89 billion, beating the expected $3.77 billion. However, forward-looking guidance dampened investor enthusiasm, sending shares down 5.6% to $199.23.
For fiscal 2026, Dick’s expects earnings in the range of $13.80 to $14.40 per share, below analysts’ consensus forecast of $14.82. The company anticipates sales of $13.6 billion to $13.9 billion, with the midpoint of this range falling short of Wall Street’s projections. CEO Lauren Hobart cited macroeconomic uncertainty as a key factor influencing the company’s cautious outlook.
Dick’s has been actively investing in both its physical store network and e-commerce capabilities. While strong growth in its footwear segment contributed to recent sales gains, the company remains wary of potential headwinds, including the impact of tariffs on consumer pricing. Executive Chairman Ed Stack acknowledged that price increases tied to trade policies could put additional pressure on shoppers.
A Retail Sector Under Pressure
The struggles of Kohl’s and Dick’s Sporting Goods reflect broader challenges in the retail industry. Economic uncertainty, shifting consumer preferences, and external pressures such as tariffs have led to increased caution among retailers. Companies like Macy’s Inc. and Victoria’s Secret & Co. have also raised concerns about their ability to maintain margins amid rising costs.
To combat declining foot traffic and sluggish sales, Kohl’s has pursued partnerships with brands like Sephora and Babies “R” Us to drive in-store visits. Similarly, Dick’s continues to expand its store footprint and strengthen its digital presence. However, these efforts may take time to translate into sustained growth.
As 2025 unfolds, the retail sector remains in flux. While some retailers may find success through strategic pivots, others could face prolonged struggles. Investors will be watching closely to see if companies like Kohl’s and Dick’s can execute their turnaround plans or if deeper structural challenges will continue to weigh on the industry.
The struggles of Kohl’s and Dick’s Sporting Goods reflect broader challenges in the retail industry. Economic uncertainty, shifting consumer preferences, and external pressures such as tariffs have led to increased caution among retailers. Companies like Macy’s Inc. and Victoria’s Secret & Co. have also raised concerns about their ability to maintain margins amid rising costs.
To combat declining foot traffic and sluggish sales, Kohl’s has pursued partnerships with brands like Sephora and Babies “R” Us to drive in-store visits. Similarly, Dick’s continues to expand its store footprint and strengthen its digital presence. However, these efforts may take time to translate into sustained growth.
As 2025 unfolds, the retail sector remains in flux. While some retailers may find success through strategic pivots, others could face prolonged struggles. Investors will be watching closely to see if companies like Kohl’s and Dick’s can execute their turnaround plans or if deeper structural challenges will continue to weigh on the industry.
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