In a retail environment roiled by the COVID-19 pandemic, Kohl’s posted a big loss but detailed how it plans on emerging from the challenging time.
First quarter net loss was $541 million, or $3.50 per diluted share, versus net income of $62 million, or 38 cents per share, in the year-earlier period. Adjusted for one-time considerations, net loss was $495 million, or $3.20 per diluted share, versus net income of $98 million, or 61 cents per share, in the quarter a year prior. The adjusted loss per diluted share came in deeper than a MarketBeat-published analyst consensus estimate, which was for a $1.59 deficit.
Total revenue was $2.43 billion versus $4.09 billion in the year-previous quarter. Kohl’s noted that it was not reporting comparable sales because of the store closures related to the COVID-19 outbreak.
In response to the coronavirus crisis, the retailer had take action to preserve financial liquidity and financial flexibility, including managing inventory receipts lower; reducing expenses across the business inclusive of marketing, technology, operations and payroll; cutting planned capital expenditures by approximately $500 million; suspending share repurchase program; suspending regular quarterly cash dividend; and replacing and upsizing revolver to $1.5 billion secured facility as well as issuing $600 million notes due 2025.
“We entered the year in a strong financial position and our business was tracking to our expectations prior to the onset of the crisis,” said Michelle Gass, Kohl’s CEO. “We immediately responded with actions to protect the health and safety of our associates and customers and to preserve our financial position. I am incredibly proud of how our associates stepped up to face this unprecedented challenge with speed and agility. 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. We have begun the rebuilding process, recently reopening about 50% of our stores across the country. 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. 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.”