As Kohl’s Corp. reopened stores across the country, the retailer continued to experience the negative economic effects of the coronavirus pandemic as sales were down again from the year prior in the second quarter.
The retailer reported a net sales decrease of 22.9% in the second quarter in filings with the Securities and Exchange Commission Tuesday. Total revenue was down 23.1% from $4.4 billion in 2019 to $3.4 billion in 2020.
It is far better than the company fared in the first quarter as all stores were closed. Kohl’s ended the first quarter with a 43.5% drop in sales compared to the same period last year. The first quarter ended May 2 — before Kohl’s started reopening its stores.
In the six months ending Aug. 1, net sales were down 32.8%, the company reported. The retailer said the start to its back-to-school shopping season was “softer” than usual with both economic uncertainty and evolving plans for students’ return to classrooms.
Kohl’s stock closed Tuesday down nearly 15%, trading at $20.01 a share. The company’s stock was trading at nearly $50 a share at the beginning of the year before the coronavirus pandemic.
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The company doesn’t anticipate that the challenges presented by the coronavirus pandemic will go away anytime soon.
“As we look ahead, we are planning for the crisis to continue to impact our business in the near-term,” said Kohl’s CEO Michelle Gass in a news release. “We are well-positioned to capitalize on evolving customer behaviors and the retail industry disruption, which we believe will drive long-term growth and increased market share.”
Home, active clothing and children’s were the strongest categories for Kohl’s in the second quarter, the company said.
Kohl’s said Tuesday all of its stores have reopened. During the second quarter, which ended Aug. 1, Kohl’s said its stores were open about 25% fewer days than the previous year. Kohl’s closed more than 1,100 stores in 49 states March 19. In-store sales accounted for 75% of all sales in 2019.
“Our organization continues to navigate through a period of extraordinary change and uncertainty presented by the COVID-19 crisis,” Gass said in the news release. “During the second quarter we made significant progress in rebuilding our business. We reopened all of our stores with new safety and operating procedures, accelerated digital growth, and showed great discipline in managing inventory and expenses meaningfully lower. In doing so, we generated positive operating cash flow and further enhanced our financial position.”
Kohl’s stores have changed with the pandemic with larger walkways, plexiglass to separate employees from customers at checkout and masks required for all.
The holiday shopping season is still ahead in the year for Kohl’s and other retailers that typically make a large portion of sales this period.
Kohl’s is preparing for a “holiday season like no other,” Gass said Tuesday. The company expects that customers will start holiday shopping earlier than normal, possibly in October.
Kohl’s has already announced that its stores will be closed on Thanksgiving Day during the pandemic. The retailer has opened its stores on Thanksgiving Day every year since 2013. Thanksgiving Day and Black Friday are celebrated by retailers as the start of the holiday shopping season when the stores typically have the highest sales.
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