The Menomonee Falls, Wisconsin-based retailer released its first-quarter earnings in filings with the Securities and Exchange Commission Tuesday.
Kohl’s reported that its net sales in the first quarter of 2020 was $2.16 billion, down from around $3.8 billion during the same time in 2019.
Kohl’s closed all its 1,158 Kohl’s stores and 12 FILA outlets in 49 states March 19. That brought a significant financial blow with store sales accounting for 75% of all sales in 2019.
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The company reported a net income loss of $541 million in the filing. It has about $2 billion in cash on hand.
The store closures did help grow digital sales 24% for the quarter. In the month of April, digital sales were up more than 60%.
Kohl’s said it has reopened about half of its stores since May 4. About half of those stores opened Monday, the company said. Its quarter ended on May 2 – before stores started to reopen.
“We have begun the rebuilding process, recently reopening about 50% of our stores across the country,” Kohl’s Chief Executive Officer Michelle Gass said in a news release. “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.”
Kohl’s stock was up about 1.5% in pre-market trading with shares trading for more than $19. At the beginning of the year, the company’s stock was trading at $49.11. The company will hold its quarterly earnings conference call at 8 a.m.
With stores closed, Kohl’s announced it would furlough the majority of its store associates and distribution center associates – about 85,000 employees. Those employees will remain furloughed until stores reopen. Health benefits will continue.
Kohl’s has reopened department stores in 10 states, mainly in the south and west. The open stores are in Alabama, Alaska, Arizona, Arkansas, Florida, Georgia, Idaho, Mississippi, Montana, Oklahoma, South Carolina, Tennessee, Texas and Utah. About 25% of the retailer’s stores are open as of the beginning of May.
The retailer said it planned to decrease its capital expenditures by half a billion dollars in late March. At the end of April, Kohl’s issued a $600 million bond offering.
Gass would not take a salary during this time, the company said in March. Her total compensation in 2019 was $8.98 million with $7.25 million in stock awards. Her salary was $1.4 million for the year, according to corporate filings.
The retailer’s open stores are operating for limited hours with social distancing measures, enhanced cleaning procedures and a new returns process.
Kohl’s ended 2019 with sales down overall 1.5%. The company eliminated around 250 positions in February as part of a companywide restructuring.
“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 said in the news release.
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