Shares of Kohl’s (KSS) are trading higher today after the retailer announced that it will close 27 underperforming stores across 15 states by April. This is being done in order to improve profitability after 11 consecutive quarters of sales declines. A leadership transition is also underway, with Michaels CEO Ashley Buchanan set to take over from Tom Kingsbury, who will stay on as an adviser and board member until his May retirement. It is worth noting that the closures will represent a small fraction of Kohl’s 1,150 stores.
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However, the retailer declined to specify how many employees will be affected by these closures but noted that workers have been offered severance packages or the chance to apply for other roles within the company. Kingsbury emphasized that these difficult decisions are essential to support Kohl’s long-term growth strategy and sustain the business for customers and employees.
Macy’s Is Following a Similar Strategy
Meanwhile, Macy’s (M) previously revealed that it will close 66 stores early this year as part of its strategy to shutter 150 underperforming locations while upgrading 350 others from now until Fiscal Year 2026. The stores being closed account for 25% of Macy’s total square footage but contribute less than 10% of its sales. Macy’s, which has also been struggling with falling sales due to inflation, hopes that the store upgrades will drive future growth.
Is KSS Stock a Good Buy?
Turning to Wall Street, analysts have a Moderate Sell consensus rating on KSS stock based on 36 Buys, five Holds, and two Sells assigned in the past three months, as indicated by the graphic below. After a 44% decline in its share price over the past year, the average KSS price target of $14.09 per share implies 3.5% upside potential.
