Kohl’s selling, general, and administrative expenses in FY22 increased by 2 per cent YoY to $5.6 billion, representing an increase of 268 bps as a percentage of total revenue. Operating income was $246 million, a decrease of 729 bps YoY. The company also reported a net loss of $19 million, or minus $0.15 per diluted share, compared to net income of $938 million, or $6.32 per diluted share in the prior year, the company said in a press release.

In the fourth quarter (Q4) of 2022, net sales decreased by 7.2 per cent YoY to $5.8 billion, with comparable sales down 6.6 per cent. Gross margin as a percentage of net sales decreased by 1,016 bps to 23 per cent, with clearance markdowns impacting margin by approximately 750 bps and product cost inflation impacting margin by approximately 200 bps. Selling, general, and administrative expenses decreased by 0.6 per cent YoY to $1.7 billion, but as a percentage of total revenue, selling, general, and administrative expenses increased by 190 bps YoY to 27.9 per cent.

The company reported an operating loss of $302 million in Q4 FY22, a decrease of 1,195 bps YoY, and a net loss of $273 million, or ($2.49) per diluted share, compared to net income of $299 million, or $2.20 per diluted share in the prior year. Inventory increased by 4 per cent YoY to $3.2 billion.

For the full year 2023, the company expects a decrease in net sales of (2 per cent) to (4 per cent), including the impact of the 53rd week, which is worth approximately 1 per cent YoY. The company also expects an operating margin of approximately 4 per cent and diluted earnings per share in the range of $2.10 to $2.70, excluding any non-recurring charges. The company plans to spend $600 million to $650 million on capital expenditures, including expansion of its Sephora partnership and store refresh activity.

“Kohl’s fourth quarter results reflect meaningful proactive measures we took to better position the business for 2023, as well as sales pressure driven by the ongoing persistent inflationary environment. Kohl’s has a solid foundation and a highly motivated team with a set of priorities to capitalise on what I see as a substantial opportunity to make a difference in the retail landscape,” said Tom Kingsbury, Kohl’s chief executive officer.

Fibre2Fashion News Desk (DP)