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Kohl's: Leadership Changes, but Strategy Likely Continues

Thomas Paulson
Nov 11, 2022
Kohl's: Leadership Changes, but Strategy Likely Continues

Key Kohl's Metrics

  • Unexpectedly, Kohl’s announced that CEO Michelle Gass is leaving the company to accept a transition role to CEO at Levi’s & Co. Also unexpectedly, the Board appointed Tom Kingsbury to serve as interim CEO. Kingsbury has been on the Board since December 2021. Previously, Kingsbury was the CEO of Burlington Stores and Senior Executive Vice President of information Technology and E-Commerce, Marketing and Business Development with Kohl’s, Inc.
  • With the announcement, came preliminary 3Q22 results including comp-store sales down 6.9%, operating margins of 4.7%, and EPS of $0.82. Compared to 2019, net sales were down about 7% which is 120 bps better than 1H22. The operating margin is roughly in-line with plan, but down 400 bps from last year and clearance actions will have reduced gross margin by 200 bps, or more. Placer.ai data suggests some improvement in their quarterly conversion rate, which likely reflects the higher discounts/value for items in the store as well as the lapping last year’s out-of-stocks in women’s out-of-the-town and back-to-work wear.
  • The leadership transition press release quotes Kingsbury saying, "The Board and I are committed to the continued refresh and innovation strategy Kohl’s has begun, the cornerstone of which is the terrific partnership we have with Sephora. I firmly believe in the long-term potential of this Company, our associates and our ability to deliver value"
  • We have no knowledge of what is to come next for Kohl’s; however, this does put the company more in play for a takeover, be it a real estate or other suitor.

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Thomas Paulson

Director of Research and Business Development, Placer.ai

Thomas Paulson spent 20 years as a Wall Street analyst and a member of asset management teams at AllianceBernstein and Cornerstone Capital, representing top-50 ownership positions including Target, Home Depot, Nike, Amazon, Google, and many more.

He brings consumer related expertise and knowledge of enterprises in retail, CPG, financial services, telecom, and entertainment.

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