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Kohl's Corporation KSS has announced plans to close its San Bernardino E-commerce Fulfillment Center and 27 underperforming stores in 2025. The decision reflects the retailer's efforts to streamline operations as it faces ongoing challenges in the competitive retail landscape.
The San Bernardino facility, operational since 2010, will close when its lease expires in May, marking a shift in Kohl's fulfillment strategy. With improvements in technology and the ability to fulfill orders from store locations, Kohl’s no longer requires the facility to meet customer demand. The store closures stem from Kohl's ongoing struggle with underperformance across markets.
While Kohl's remains confident in the overall strength of its store portfolio, these closures, though a small portion of its network, reflect the challenges the company faces in a competitive market. The company’s shares have slumped 29.1% in the past three months against the industry’s growth of 7.6%.
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What Else Should You Know About Kohl's?
The Zacks Rank #5 (Strong Sell) company continues to bear the brunt of a challenging macroeconomic backdrop. The company’s third-quarter fiscal 2024 results fell short of expectations, with sales remaining weak in the apparel and footwear sectors. While the company saw strong performance in key growth areas such as Sephora, home decor, gifting and impulse categories, as well as the opening of Babies "R" Us shops in 200 locations, these gains were not enough to offset declines in core business segments.
In its last earnings call, Kohl's highlighted that it is lowering its fiscal 2024 outlook, reflecting fiscal third-quarter underperformance and expectations for a highly competitive holiday season. For fiscal 2024, management forecasts a net sales decline of 7-8%, a revision from the previous expectation of a 4-6% decline. Management anticipates earnings per share between $1.20 and $1.50, revising the earlier forecast of $1.75 to $2.25 for the full year.
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