02:43 PM EDT, 08/28/2024 (MT Newswires) -- Kohl's (KSS) lowered its full-year sales forecast on Wednesday after reporting a bigger-than-expected annual decrease in fiscal second-quarter revenue, though earnings outperformed as the company upgraded its full-year bottom-line guidance.

The department store chain is now guiding for a 4% to 6% year-over-year decline in sales off of last year's sales of $16.59 billion. That is reduced from the 2% to 4% decrease it predicted at the end of May. Analysts in a Capital IQ survey are modeling for revenue of $16.18 billion this year.

The company's earnings per share target was lifted to a range of $1.75 to $2.25, up from a prior guidance of $1.25 to $1.85. The market view is for GAAP EPS of $1.51 for the ongoing year.

"Our outlook for the balance of the year assumes the macroeconomic environment will remain challenging," Chief Executive Tom Kingsbury told analysts on a conference call, according to a Capital IQ transcript.

The company's operating discipline, cash flow generation and balance sheet will continue offering support as the company works to return to growth, he said.

For the second quarter, revenue fell to $3.53 billion from $3.68 billion year over year and missed the $3.65 billion average analyst estimate on Capital IQ. EPS rose to $0.59 for the three months ended Aug. 3 from $0.52 the year earlier and beat the $0.44 market view.

Comparable sales were down 5.1% during the quarter though Kohl's experienced an increase in overall transactions, according to Kingsbury.

"Our customers exhibited more discretion in their spending, which pressured overall sales and overshadowed strong performance in our key growth areas, including Sephora, home decor, gifting and impulse," he told analysts.

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