In his first earnings cycle at the helm, Kohl’s new CEO Ashley Buchanan laid out his plan to turn around the embattled company, which has struggled for years to return to a position of strength while fending off activist investors.
Like his predecessors, Buchanan said he sees plenty of opportunity for the company but that a turnaround will take time, indicating that the goal of the actions being taken in 2025 will “lay a groundwork for future progress and initiatives.”
Buchanan Says Kohl’s Declines are in Part ‘Self-Inflicted’
Sales were down at the department store in both Q4 2024 and for the full year, both of which ended Feb. 1, 2025. In Q4, net sales decreased 9.4% and comparable sales were down 6.7% year over year, mimicking results for the full year where net sales decreased 7.2% and comparable sales were down 6.5%.
“Kohl’s is a strong company built on a very solid foundation, with over 1,100 stores and serving more than 60 million customers,” said Buchanan on a call with analysts. “The opportunity that lies ahead of us is substantial. Kohl’s serves an important role in the retail landscape, and we have the ability to better execute and serve our customers.
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“A lot of our issues really were probably self-inflicted over many years of decisions,” he added. “When I toured stores, all I heard was how much [people] love Kohl’s, but I realized that we are kind of making it hard for them to love us. I just knew that we could do better. And I think the customers expect us to be better.”
Private Label Central to Buchanan’s Three-Part Turnaround Plan
To shift the tide, Bucanan laid out three distinct areas where the company will seek to improve.
First, assortment, with a focus on prioritizing growth categories and private label brands such as Sonoma and Flex. The retailer’s store-in-store partnership with Sephora remains a strong point, with comparable beauty sales increasing 13% in Q4 over the previous quarter.
“Recently, our focus has been heavily weighted on new products to attract new customers, and we have deemphasized our products and categories that our core customers love,” said Buchanan. “Kohl’s recognized this in 2024 and immediately began to refocus attention on categories where we have lost traction, including fine jewelry, petites and proprietary brands. We are working diligently to find the right balance within our assortment, and we’ll deliver what our customers want and expect from Kohl’s.”
Second, value, where private label will again play a role: “These brands provide quality, value and an exclusive reason to shop at Kohl’s,” said Buchanan. “Strengthening our proprietary brand offering is key to our success.”
Adjustments to the company’s selection of national brands and promotional strategy also are underway. “Over the years, our list of excluded brands on our coupon has grown too large, with the percent of sales that are excluded from coupons reaching an all-time high in 2024,” said Buchanan. “This has created confusion and frustration with our loyalist customer. We’re in the process of reversing some of these exclusions to simplify the experience and allow our customers to shop with our promotional coupons more consistently.
“Our goal is to offer quality products at great prices across our entire brand portfolio, so our customers can more clearly see the value they’re getting with their purchase,” he added.
Store Footprint to Remain Steady, but Digital Needs Work
The third piece of Buchanan’s turnaround strategy involves removing friction in Kohl’s omnichannel offerings. Buchanan doesn’t expect any significant additional brick-and-mortar closures following the shuttering of 27 stores in January, saying that most of the remaining stores in Kohl’s fleet are profitable. However, the layout of those stores needs some work, with store layout optimization in the works to provide better “clarity to the customer or [to] the purpose of each brand.”
Digital is another story though, with Buchanan admitting that “there’s a bifurcation between us and our peers on how our ecomm business is performing.” CFO Jill Timm also pointed to digital as an area of particular weakness, highlighting digital’s comparable sales declines of 13.4% in Q4 and 8.7% over the year. Details on how this would be improved weren’t shared, but Buchanan noted that “we are excited about the opportunity to leverage technology, and we will have more to share later in the year as we develop these plans.
“The goal of all this work is to make shopping at Kohl’s a more enjoyable and reliable experience,” concluded Buchanan. “We will work to create a more efficient organization that will focus on reducing costs to allow us to invest in our future growth. We know that part of setting up the business for future success is to have a high level of discipline on managing costs.”
