Kohl's 4-percent increase in sales between Thanksgiving and Christmas "was substantially offset by softness in early November and in January, when demand for cold-weather goods was especially low," said Kohl's Chairman, President and CEO Kevin Mansell.
CLEVELAND, Ohio -- Kohl's Department Stores plans to close 18 underperforming stores in 2016, after profits dropped 20 percent in the fourth quarter and sales -- especially of cold-weather goods -- fell short of company expectations.
Sales at Kohl's stores open at least one year, called comp-store sales, rose only 0.4 percent to $6.4 billion in the fourth quarter that ended Jan. 30, usually the biggest and most critical for retailers.
That's a major drop from the 3.7-percent increase Kohl's saw in the fourth quarter of its 2014 retail year, when its stores stayed open more than 100 hours straight, from 6 a.m. Dec. 19 through 6 p.m. Christmas Eve.
Kohl's Corp., based in Menomonee Falls, Wisconsin, said Thursday that it will announce the 18 closing locations by the end of March. They represent less than 1 percent of total sales at its 1,164 stores in 49 states.
Kohl's stores in Northeast Ohio include locations in Akron, Aurora, Avon, Fairview Park, Highland Heights, Kent, Lorain, Macedonia, Medina, Mentor, North Canton, Parma, Stow, Strongsville, Wadsworth and Wooster.
Kohl's diluted earnings per share were $1.58 in the fourth quarter, down 14 percent from last year's $1.83, but still better than some analysts had expected.
Net income fell 20 percent to $296 million for the fourth quarter.
For the 2015 retail year, comp-store sales increased 0.7 percent to $19.2 billion, compared to a 0.3 percent drop to $19.0 billion in 2014.
Profits for the full 2015 year fell 22 percent to $673 million, and dropped 18 percent to $3.46 per diluted share.
"We believe that the strategic framework of the Greatness Agenda is working as evidenced by our achievement of five consecutive quarters of positive comparable sales increases," said Kohl's Chairman, President and Chief Executive Kevin Mansell, in a written statement. "I am particularly encouraged by the 4 percent increase we saw between Thanksgiving and Christmas. At the most competitive time in retail customers were choosing Kohl's.
"This strength, however, was substantially offset by softness in early November and in January, when demand for cold-weather goods was especially low, resulting in a quarterly comparable sales increase of 0.4 percent, which was below our expectations."
Kohl's said closing stores will save about $45 million in annual selling, general and administrative expenses, and about $10 million in annual depreciation. The company said the closures and the organizational realignment of its corporate offices earlier this month will cost $150 million to $170 million.
To help boost sales in 2016, Kohl's said it is also:
-- Opening seven smaller-format Kohl's stores around the country.
-- Adding two more Off-Aisle pilot stores in Wisconsin.
-- Opening 12 Fila outlet stores, Kohl's first retail outlets.
"We see exciting growth potential in the new stores and new formats that we are opening this year and are heavily investing in the health of our overall stores portfolio to continue to serve our current and future customers," Mansell said.
"While the decision to close stores is a difficult one, we evaluated all of the elements that contribute to making a store successful, and we were thoughtful and strategic in our approach. We are committed to leveraging our resources on our more productive assets," he said
"Importantly, we also wanted to provide the best options for our associates and are proud that every affected store associate will be offered a position at a nearby Kohl's location, or if they prefer, a competitive severance package."