Kohl's cuts annual forecast, as it gets stung with inflation

NEW YORK (AP) — Kohl’s Corp. cut its earnings forecast, as the department store chain joins a string of retailers stung with soaring inflation.

The cut in the company's forecast, announced Thursday, came as it reported that its fiscal first-quarter financial results were below Wall Street expectations.

Shares were down nearly 6% in premarket trading.

Like many department stores, Kohl’s had struggled before the pandemic, but the health crisis wielded a big blow to sales. The company’s business was rebounding as customers were going out to social events and buying dressier clothes. But like other stores, it's now grappling with supply chain issues and surging inflation that is causing pain to its business. Moreover, shoppers, facing with higher costs on everything from gas to milk, are scrutinizing their purchases.

It's been a brutal earnings season for many retailers so far. Target reported Wednesday that its profit tumbled 52% compared with the same period last year in an environment of rising costs for things like fuel, and also a lightening quick return by consumers to more normalized spending. On Tuesday, Walmart's shares tumbled about 17% for similar reasons after it posted quarterly results.

“The year has started out below our expectations," said Kohl's CEO Michelle Gass in a statement. She noted that following a strong start to the quarter with sales at stores up by low single digits, sales considerably weakened in April as it encountered surging inflation and lapped against last year's stimulus plan.

Still, the company said that it remains committed to its long-term strategy and said that its Sephora stores at Kohl's delivered positive sales across the 200 location for the quarter. Gass expects business will improve in the second half as it benefits from the...