Kohl’s (KSS) Stock Jumps 8% as CEO Steps Down

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Shares of department store retail chain Kohl’s (NYSE:KSS) gained 8% on Tuesday following an announcement that its CEO Michelle Gass will leave the struggling outfit early next month to join Levi Strauss (NYSE:LEVI). Despite significant efforts to turn around the troubled retailer, KSS stock began noticeably slipping since November 2018. With activist investor Ancora Holdings consistently calling for a leadership change, Gass operated on borrowed time.

According to the Wall Street Journal, Gass will leave Kohl’s on Dec. 2 and join Levi on Jan. 2. There, she will serve as the chief executive, succeeding Levi’s current CEO Chip Bergh. In addition, she will also serve as president, with oversight of Levi’s brand and global digital and commercial operations.

Per the WSJ, Kohl’s appointed Tom Kingsbury as interim CEO until the retailer finds a permanent successor. Previously, Kingsbury headed Burlington Stores (NYSE:BURL) as the head exec. He joined Kohl’s board in 2021 as part of a settlement with activists. In a statement, Ancora expressed satisfaction with the executive shift along with Kingsbury’s appointment as interim CEO.

In Kohl’s press release, board chair Peter Boneparth stated, “The Board is grateful for Michelle’s many contributions since she joined the Company in 2013. Under her leadership, the Company has driven a strategic transformation, expanded its partnerships and brand portfolio, and supported an inclusive and collaborative culture. On behalf of all Kohl’s associates, we wish her well in her next endeavor.”

KSS Stock Needed a Refresh

Although stakeholders of KSS stock will finally enjoy a new direction in the underlying business, Gass at least deserves credit for attempting to right a sinking ship.

Initially, the company enjoyed some early success under her leadership, encouraging the introduction of new ideas. For instance, Gass formed a partnership with Amazon (NASDAQ:AMZN) that allowed shoppers to use Kohl’s stores to return goods bought at the online retailer, per the WSJ. She also managed to woo Sephora away from JCPenney, where it operated shops for more than a decade.

As well, under Gass’ leadership, Kohl’s dropped underperforming brands and introduced new, compelling alternatives. Unfortunately, these and other efforts — including store refurbishments — failed to attract shoppers and impress shareholders. With KSS stock struggling before and after the coronavirus pandemic, the writing was on the wall.

Nevertheless, Gass will leave Kohl’s on a relatively positive note. Per a Barron’s report, the retailer released preliminary results for the third quarter. In it, the company “anticipates earnings of 82 cents a share, higher than analysts’ forecasts of 63 cents.”

Still, this being KSS stock, the results weren’t holistically uplifting. Kohl’s anticipates that comparable-store sales decreased 6.9%. However, analysts polled by FactSet targeted a same-store sales decline of 6.8%.

On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.

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