Kohl’s Corp.’s balance sheet took a huge hit in the first quarter as the coronavirus pandemic forced its stores across the country to shut down.
For the three-month period ended May 2, the Menomonee Falls, Wis.-based company posted an adjusted loss of $495 million, or a loss of $3.20 a share, compared with last year’s earnings of $98 million, or 61 cents a share. Wall Street had predicted a loss of $1.75.
While Kohl’s revenues plummeted more than 40% to $2.43 billion, it still trumped analysts’ expectations of $2.16 billion. Online sales, on the other hand, jumped 24% in the quarter and surged more than 60% in April — the majority of which consumers spent on lockdown as COVID-19 took hold in the United States.
Over the past two weeks, about half of the department store chain’s stores — which were temporarily closed on March 20 — have reopened. (The retailer operates more than 1,100 outposts across the country.) In the coming weeks, it plans to open back up more locations in line with state and local guidelines.
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“In doing so, we have taken special care to equip our stores with the latest health and safety measures as we welcome back our associates and customers,” CEO Michelle Gass said in a statement. “As we look ahead, we know this experience will have a lasting impact to customer behavior and the retail landscape, and we are evolving our strategies to ensure our relevance and to capture market share.”
Kohl’s had previously withdrawn its full-year forecast, as well as suspended its share buyback plan and decreased its capital expenditures. What’s more, it had fully drawn down its $1 billion revolving credit facility to bolster its liquidity position. At the end of the quarter, the company had $2 billion in cash at hand.
“We entered the year in a strong financial position and our business was tracking to our expectations prior to the onset of the crisis,” Gass added. “Our actions to manage cash outflow and increase liquidity have been instrumental in enhancing our position to navigate this crisis, and we believe our history of prudent capital management will continue to serve us well.”