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The department store chain said online sales declined 10% in Q4, accounting for 35% of quarterly revenue, down from 37% last year.
Kohl’s Corp. reported net sales declined in both its fourth quarter and fiscal 2023 ended Feb. 3, 2024. In addition, the retailer previewed plans to expand baby product offerings through new Babies R Us stores, which are scheduled to open within some Kohl’s locations.
Q4 net sales declined 1.1% to $5.7 billion, despite an extra week of trading this year compared to Q4 2022. Comparable sales fell 4.3%. Those declines were on top of a 7.2% drop in net sales in Q4 2022.
However, Kohl’s Q4 net income grew to $186 million, compared to a net loss of $273 million in the year-ago period.
Results for the 2023 fiscal year followed the same pattern as Q4 results. Net sales declined 3.4% to $16.6 billion, and comparable sales declined 4.7%. Net income was again the bright spot, growing to $317 million from a net loss of $19 million in fiscal 2022.
“2023 represented an important year for Kohl’s. We enhanced our store experience, expanded our partnership with Sephora, and invested in underpenetrated categories,” CEO Tom Kingsbury said in a statement on March 12. “We also simplified our value strategies and implemented new inventory management processes. The early success of our strategies is evident. Our store business had its best comparable sales performance since 2010, Sephora at Kohl’s continued to drive meaningful beauty sales growth, and we managed inventory down 10% at year end.”
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Kohl’s is No. 23 in the Top 1000. The database is Digital Commerce 360’s ranking of the largest North American online retailers. Digital Commerce 360 categorizes Kohl’s as an retailer.
Kohl’s Q4 digital sales
Kohl’s online sales declined 10% in the quarter, Kingsbury said in an earnings call. However, they improved as the quarter progressed, he added. December and January sales were only down “mid-single digits,” year over year, Kohl’s said. They accounted for 35% of Q4 sales at Kohl’s, down from 37% in the previous year.
In fiscal 2023, online sales declined 15% over 2022. Ecommerce accounted for 29% of annual sales.
Babies R Us
Kohl’s also announced that it reached a deal with WHP Global to open Babies R Us stores inside certain Kohl’s locations. The first locations will open in August, with plans to place 200 Babies R Us shops inside Kohl’s in fall 2024. The stores will be between 700 and 2,500 square feet, dedicated to baby apparel, bath products, furniture, feeding products and more, Kohl’s said.
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WHP Global acquired Toys R Us and Babies R Us in 2021, several years after the retailer filed for bankruptcy. WHP Global has a similar deal with Macy’s, with Toys R Us shops inside Macy’s locations.
“Our strategic initiatives are positioned to build momentum and contribute more meaningfully, and we will partner with Babies ‘R’ Us to meaningfully expand our presence in the baby gear category, which represents a compelling white space opportunity for Kohl’s. Through our collective efforts, Kohl’s is becoming more relevant to customers, which strengthens our conviction in our longer-term opportunity,” Kingsbury said.
Kohl’s will also be the home of a new registry system for parents through Babies R Us, adding baby items to its website in the fall. The collaboration is an opportunity to draw in new customers who could become loyal to Kohl’s for their baby needs, the retailer said.
Kohl’s earnings
For the fourth quarter ended Feb. 3, Kohl’s reported:
- Net sales declined 1.1% to $5.7 billion.
- Net income grew to $186 million from a net loss of $273 million in the year-ago period.
- Kohl’s online sales declined 10%.
For the fiscal year ended Feb. 3, Kohl’s reported:
- Net sales declined 3.4% to $16.6 billion.
- Net income was $317 million, from a loss of $19 million in 2022.
- Kohl’s online sales declined 15%.
Percentage changes may not align exactly with dollar figures due to rounding.Check back formore earnings reports.
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