What Happened?

Shares of department store chain Kohl’s (NYSE:KSS) jumped 5.4% in the morning session after data from Adobe Analytics, which tracks retail transactions, revealed that shoppers spent a record $10.8 billion online on Black Friday (2024), representing more than a 10% growth compared to the previous year, and more than double what consumers spent in 2017. This is a bullish 'read-through' for retailers and aligns with some of the positive sentiments and holiday spending trends observed by some of the companies that have reported this earnings season.

After the initial pop the shares cooled down to $15.47, up 3.2% from previous close.

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What The Market Is Telling Us

Kohl’s shares are very volatile and have had 22 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business. 

The previous big move we wrote about was 6 days ago when the stock dropped 22.5% on the news that the company reported weak third-quarter results, which missed analysts' EPS and operating profit estimates. Sales were also underwhelming, down 9% y/y, and in line with estimates. Management added that "sales remained soft in our apparel and footwear businesses." Furthermore, its full-year EPS guidance fell short of Wall Street's estimates. 

Overall, this was a weaker quarter. Following the results, Tom Kingsbury is expected to step down as CEO, effective January 15, 2025. He will be replaced by retail veteran Ashley Buchanan.

Kohl's is down 44.8% since the beginning of the year, and at $15.47 per share, it is trading 47.3% below its 52-week high of $29.36 from December 2023. Investors who bought $1,000 worth of Kohl’s shares 5 years ago would now be looking at an investment worth $330.40.

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