Kohl's experiences a 20% drop in stock value following a significant earnings disappointment.

• Kohl's reported a quarterly loss and fell short of Wall Street's revenue forecast for the first quarter.
• The retailer also also lowered its forecast for the full year.
• The company reported a successful Sephora shop-in-shop collaboration and announced a similar partnership with Babies R Us in March.

Wall Street's expectations for a slight profit were not met by the company, resulting in a more than 20% drop in shares during premarket trading on Thursday after the company posted a surprise loss per share.

According to a survey of analysts by LSEG, how Kohl's performed in its fiscal first quarter compared to Wall Street's expectations.

• Loss per share: 24 cents vs. a profit of 4 cents expected
• Revenue: $3.18 billion vs. $3.34 billion expected

Kohl's reported a net loss of $27 million, or 24 cents per share, compared to a year-ago profit of $14 million, or 13 cents per share.

In contrast to the previous year, net sales decreased by 5.3% to $3.18 billion, while comparable sales dropped by 4.4%.

The company revised its 2024 sales guidance, now anticipating a decline of between 2% and 4%. Wall Street analysts surveyed by LSEG had previously predicted a 0.2% increase in sales for 2024.

LSEG reports that Kohl's expects full-year diluted earnings per share to be between $1.25 and $1.85, significantly lower than the anticipated $2.34 per share.

"CEO Tom Kingsbury acknowledged in a release that there is still more work to be done in certain areas of the business. He stated that the company is taking a more cautious approach to its financial outlook for the year due to the first quarter's underperformance and the ongoing uncertainty in the consumer market."

In March, Kohl's announced plans to add Babies R Us in-store outposts to approximately 200 locations, following the positive trends observed in the women's category and continued growth in the retailer's Sephora shop-in-shop partnership.

Our conviction in our strategy remains strong, and we are confident that our key growth initiatives, including Sephora, home decor, gifting, impulse, and our upcoming partnership with Babies 'R' Us, will have a more significant impact in the future, as stated by him.

This story is developing. Please check back for updates.