KL's cuts 2022 sales, profits on higher discounts

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KL's cuts 2022 sales, profits on higher discounts

Despite high inflation, Kohl's Corp cut its full-year sales and profit forecasts on Thursday, squeezed by steeper discounts and higher costs.

Shares in the Menomonee Falls, Wisconsin-based retailer slumped 10% in premarket trading.

Decades-high inflation has made Americans more wary of opening their wallets to clothing, shoes and other non-essentials, pressuring demand at retailers and leaving them with bloated inventories.

Kohl's, which leans toward casual styles and caters to low-income customers, is taking a bigger hit as a result of a return to office and social events and a resilient high-income consumer.

The U.S. department store chain expects net sales to fall between 5% and 6% in fiscal 2022, compared with its previous forecast of flat to 1% growth.

The company said it expects to get $2.80 to $3.20 earnings per share by the end of 2022, compared with its previous forecast of $6.45 to $6.85. According to Refinitiv data, analysts expect a profit of $4.06 per share.