11:37 AM EST, 11/26/2024 (MT Newswires) -- Shares of Kohl's (KSS) plunged intraday Tuesday after the retailer reported a bigger-than-expected decline in fiscal third-quarter revenue and lowered its full-year financial outlook, a day after the department store chain announced a chief executive transition plan.

Sales dropped to $3.51 billion for the three-month period ended Nov. 2 from $3.84 billion a year ago and missed the $3.64 billion average analyst estimate on FactSet. Earnings per share more-than-halved to $0.20 from $0.53.

"Our third quarter results did not meet our expectations as sales remained soft in our apparel and footwear businesses," CEO Tom Kingsbury, who will step down on Jan. 15, said in a statement.

Shares of Kohl's tumbled 20% in Tuesday trade.

Strong performance across key growth areas, including makeup shop Sephora and home decor, as well as the opening of Babies "R" Us shops in 200 stores, was offset by declines in the core business, according to Kingsbury. "We are not satisfied with our performance in 2024 and are taking aggressive action to reverse the sales declines," he said.

Kohl's announced late Monday that retail veteran Ashley Buchanan, who has been CEO of arts-and-crafts retailer Michaels since 2020, will become the company's next CEO. Kingsbury will serve in an advisory role and retain his position on the Kohl's board until May when he retires.

Management now expects full-year sales to decline 7% to 8% from fiscal 2023's sales of $16.59 billion. That's down from the 4% to 6% decrease it guided for in August. The market view on FactSet is for sales of $15.66 billion in the ongoing year. The new outlook projects a 6% to 7% decrease in comparable sales, worse than the previous expectation of a 3% to 5% decline.

The company sees full-year EPS in the $1.20 to $1.50 range, below its August guidance of between $1.75 and $2.25. Kohl's dampened operating margin expectations to between 3% and 3.2% from 3.4% to 3.8% previously.

"We are approaching our financial outlook for the year more conservatively given the third quarter underperformance and our expectation for a highly competitive holiday season," Kingsbury said.

Price: 14.69, Change: -3.65, Percent Change: -19.90