Kohl’s forecasts steeper annual sales drop than estimates

A file photo shows a Kohl's department store, in Doral, Fla. (AP / Wilfredo Lee)

Kohl’s on Tuesday forecast a steeper annual sales drop than expected, as budget-conscious shoppers pull back spending on higher-margin items including apparel and home goods at its department stores, sending its shares down about eight per cent premarket.

The increasing costs-of-living and signs of deteriorating labor market conditions have squeezed the appetite of consumers, especially from lower-income groups to shop for nice-to-have items.

The company expects full-year sales to be flat to decline two per cent, compared with analysts’ estimates of a 0.7 per cent decline to US$14.85 billion, according to data compiled by LSEG.

(Reporting by Anuja Bharat Mistry in Bengaluru; Editing by Maju Samuel)