In the face of a tough retail environment, Kohl’s is reshaping its identity to feature its value-driven appeal for the entire family. With sales slipping and consumers tightening their belts, the retailer is doubling down on its promise of affordability, hoping to transform current challenges into opportunities for deeper customer connections and growth.
On the heels of a disappointing second-quarter performance, which saw net sales slip 4.2% and comparable sales fall 5.1%, Kohl’s CEO Tom Kingsbury told investors and analysts on an Aug. 28 call that company officials have implemented a “number of actions to ensure that our customers recognize all of the enhancements we have made across product value and experienced during the past year.”
Kingsbury noted: “We are evolving our marketing message to increase consideration of Kohl’s as a leading destination for value for the entire family. Our advertising has already begun to include messaging around lower price points across our assortment.”
Kohl’s customers “exhibited more discretion during the second quarter,” Kingsbury noted, because “inflation and high interest rates continued to pressure spending, especially among our middle-income consumers. We are seeing the clearest evidence of this in the performance of our core apparel and footwear offering, which experienced broad softness in the quarter.”
Part of the company’s evolving marketing messages, Kingsbury said, will focus on “leveraging real customers and influencers to showcase, not only our great values, but also our enhanced product offering. We’ll continue to lean into Kohl’s Cash as a key value differentiator. Beyond our marketing efforts, we know we have more work to do in our core apparel and footwear business to improve the sales trends, which frankly have been disappointing. To be clear, we remain confident that the product we are offering today is more relevant to our customers.”
Recent customer insights show “more of our customers feel Kohl’s resonates with them and by an increase in conversion we experienced in the second quarter,” Kingsbury said. “We are delivering growth in our new products, including dresses, which are benefiting from expanded space in our stores, as well as market brands, which are resonating well with our customers. We are seeing promising initial sell-through trends in newly introduced brands such as Aeropostale and Limited Too.”
Kingsbury highlighted strategic priorities to elevate the customer experience: accelerating and simplifying value strategies, managing inventory and expenses with discipline, and strengthening the balance sheet.
Sephora at Kohl’s continues to be successful, Kingsbury said, as total beauty sales rose about 45%.
“Our partnership with Sephora has been incredibly successful,” he said. “Together, we have acquired millions of new customers and gained significant market share within the industry. Sephora now has a presence in 1,050 of our stores, following the opening of 140 shops this year. Looking ahead, we are confident in our ability to continue driving solid growth.”
Looking ahead to the rest of the year, Kingsbury said Kohl’s will be “very promotional. We’re really focused on that. The customer is squeezed, and we think it’s really important that we deliver as much value on the selling floor as we possibly can. The fourth quarter is always promotional, but we think it’s going to be even more promotional just based on what we’re currently experiencing right now.”
We’re always on the lookout for opportunities to partner with innovators and disruptors.
Learn More