Kohl's forecasts lower annual sales as spending slows

Kohl's issued a cautious outlook for the fiscal year on Tuesday, projecting annual sales that trail Wall Street estimates. The department store operator cited a pullback in spending by budget-conscious consumers on higher-margin discretionary items, including apparel and home goods. According to data from LSEG, the company anticipates full-year sales to range from flat to a 2% decline, whereas analysts had forecasted a more modest 0.7% decrease to approximately $14.85 billion. This shift in consumer behavior reflects a broader trend across the retail industry, impacting various segments from department stores to specialized apparel firms like V.F. Corporation. As inflationary pressures persist, retailers are facing increased difficulty in driving volume for non-essential products. The updated guidance highlights the challenges facing traditional brick-and-mortar locations as they attempt to maintain margins amidst a cooling economic environment.