Kohl's (KSS) 26 Nov 242025 Q3 Earnings call transcript

Thank you for standing by. My name is Briana, and I will be your conference operator today. At this time, I'd like to welcome everyone to the Kohl's Corporation Third Quarter 2024 Earnings Conference Call. Please note that this call is being recorded. [Operator Instructions] I'll now turn the conference over to Mark Rupe. sir. ahead, go Please

may limited which most be statements forward-looking the described this forward-looking in company's subject those XX-K and statements in Certain Kohl's recent uncertainties to actual time report other financial are materially and from in Such differ include, which statements. including risks results by are Item from uncertainties risks filings SEC, certain and future in to cause made you. supplemented Kohl's that call, results expressly as but time to with reference. such to, those on projected incorporated herein are projected Such all could Form annual not statements. Thank are on initiatives, Kohl's XA of are the and

relate obligation initially Kohl's made, Forward-looking the date and to them. statements undertakes to update no

call, exhibit Relations to non-GAAP the addition, make on an as financial In Investor Form and the the is company's can available SEC financial of investor be measures we this found in X-K filed to measures. filed Reconciliation with website. during reference our presentation non-GAAP

note call will be recorded. Please that this

However, updated. replays will this of be call not

listening of it possible no this the a if is obligation is to Kohl's longer information such call, discussed undertakes and information. So that current, no you're update replay to

and With Timm, our Bender, are the Officer. our CEO; Michael Kingsbury, me our Jill morning Board; Chief this Independent Chair Tom of Financial

Michael. to I over will now the turn call

our you results. for Tom turn brief to And third us it Thank some I'll review introductory going Jill thank you, then provide to quarter and morning. and Mark. joining this I'm remarks, to over

take some Q&A. then We will

of to want and behalf associates, May for On XX, effective the the and thank in and stay management role on our the to an and Kohl's. position will in leadership ongoing XXXX. of As service I CEO all step I Kingsbury will night, shared down XXXX, his new Board, his as to on advisory CEO Tom retirement Board retain last through January his Tom

we has of for our Tom stepping as the Ashley to Kohl's, retail and to in years. are grateful history a as couple you effective know, the appointed Buchanan January through CEO excited has XX. I'm of lot that him share past us a Board with veteran transformation over many of lead

leader CEO retail Walmart a we Ashley e-commerce has and XX continue been business prior Companies roles will the as XXXX of to executive at experience, future since steady, Michaels during merchandising operations, at Club that, Kohl's, of leading drive and and proven His Sam's to bring years vast transform to company. the senior variety held growth. his a and

change accountability driven for teams a great chapter. has know perspective leader he and in empowering be new our organizational clear practicing next Ashley and will vision, a a We results. setting bring by

quarter to call the over discuss our turn now third I'll results. to Tom

to supporting Michael, I great long-term you, of management morning, associates broader like look everyone. our Ashley this during the couple and lead Thank and for opportunity Board forward and would I the years. team significant, opportunity good to first the past is Michael, Kohl's to the transition. thank through company and

not and XXXX results. us for weakened challenge further and Turning QX. meet Sales third were been a disappointing. They quarter did to frankly throughout our our in have expectations

the will in-store competitive implemented last of a our experience. make over quarters, and value the assortment, more across long several strategies believe have us We term. Over we significant amount actions change these

soft as short-term sales add quarter this remained declined sales However, change in the X% we and on Comparable impact the footwear businesses. our apparel our in sales undervalued performance. third could

business. offset Decor, opening Although These the our also XXX and unable "R" core Gifting including benefited are of we key had stores. areas, strong the and a from our in Us collective across growth our Babies to Home of performance shops declines Impulse in Sephora,

putting satisfied are execute and and reverse first at we our taking higher a do. the We are everything clients. We customer level performance must ensure action are sales aggressive not the to to in with we

Jill XXXX reflects seen the we expectation of competitive updated this continuation year later year and guidance As the sales holiday pressure in fiscal the a call, will our our season. for highly have discuss

sales My our that be forward. drivers today third the and we are will underperformance. focus identified key to our discussing sales stabilize going and we business taking our during the assessing X In led areas main to the weakness of actions now quarter, the trend

A back-to-school traffic, decline during early especially the in include: the in quarter They season.

sales petites our that reduction and have our represented as ability in and home for jewelry, apparel such in going private fine items categories value impacted Our receipts where us legacy in apparel and opportunities brands, key products. to we traction which our drive forward, lost

the start In area, This QX decline approximately change the Let's with represented after transactions is approximately first the in which deceleration declined traffic. QX. X% QX, increasing QX. in comparable in in sales versus X% entire

in early being during the August notable most back-to-school weakest season with was month. the transactions quarter, in the Softness

children's challenged Our in late this though in during was time, improved quarter. apparel the especially business

responsiveness the In most in are through more marketing. they this customers if driving with and response highly engaged have on focused form QX, softer touch we of direct our experienced We mail points are trends shown a to to traffic. increasing targeted our greater offers

and this customer showcasing merchandise are offering continues that the holiday In our message. marketing pressured, to are our be great value we assortment our across we addition, given

holiday We during X and capitalize and new significant members acquisition will marketing to rewards-only added a continue in season. also opportunity drive new Kohl's nearly with customer digital the see social lean Rewards XXXX on million into events to the to targeted

a is in our sales value key The which drive in our to brands, ability items. second impacted apparel our private receipts in area reduction

we by more and managed XX new very largely regular processes with by a inventory more months, driven Over implemented operating the basis. clearing have tightly, past on liquidity goods open-to-buy

a brands on also merchandise. number increased the we as we capitalize investments in significant Gifting our key new And At categories our brought such market Decor, Sephora, in inventory Impulse. trend-right growth same time, of Home and have to

meaningfully than to of compared brands, levels private QX, apparel the receipt inventory even led our In prior the key in year these our as to lower Together, it for brands, rely XX% several and customers which decreased decreased more. on. private brand investments more

positive brand although as are penetration. highest Given price not of And current in also brands men's private our having points brands appropriate business newness we with our customers. selling seeing in sell-throughs and hits environment, This our businesses. our to where hurt the the of level It are our evident in an serve impact was ability the private women's we we the opening floor. pleased the have in importance had outsized private children's the

enough brand a given to investments We categories. job simply growth our brands be of key market inventory and must and into the did to better managing balancing while not these the we moves. long-term our initiatives key have private though, in believe the simply categories core growth are investments market strategy clear brands continue do strategic our We I want right business.

brands This levels, increasing which These now our is holiday. inventory hitting evident private primarily in-transit our term actions selling our the our goods year. to of consists in in begun have have key balance me balance we one, share to prior to across in for taking time proper are Number the assortment. now are the floor already XX% we brands. ensure the Let when immediate compared support buys regain for near we inventory the to our private

brands our leveraging that chase our a Additionally, than build for been a we we as are presence place. are through brands, which we ensuring market have opportunistically rather approach replacement private taking

XXXX. actions to expect our take to our inventory, reposition will deliver greater some time trends do relative we it While in with in early QX benefit improved

area categories a traction of category jewelry lost our third by our us valued that where have The going the from was the exit that notable has example been business, forward. customers. represent opportunities is for we And fine most highly this

persistent displaced introduced we jewelry in into many headwind the resulted was largely for performance business As to periods. stores, sales fine shops which our a our

On stores. a note, our are season positive holiday our to jewelry excited customers to reintroduce fine XXX we in of this

will QX have and we for stores, of up expanded placement jewelry. the fashion will in positive bridge bridge in-aisle an all jewelry growth We in saw also sales which build

expect in much QX jewelry initiatives. category on the we Overall, in our stronger performance based

we we at business. time in also with home that addition the actions see in opportunities legacy intimates petite, move our jewelry, to reduced a conjunction XXXX, in presence and In was our In meaningfully to reduce petite, inventory.

XXXX, This petites into Based quarter. our was In a offering see the resolving. expanded we and continuing XXXX, build we QX this shortsighted our and assortments the QX. in committed are to increased to we began initial we decision in that expect business to stores petites all on through momentum this,

we see intimates, In to in pressure QX. sales continue

in in of this in part with we As on of inventory struggled which is sized depth, I important assortments last some category. quarter, our intensive touched lack to due the highly key brands have

a led During to all newness enhanced improvement basis we through step and quarter, in across which better as October. results QX, including point XXX move trend accelerated we brands, the

trends QX, key expect build and to supported better events. We inventory further in support marketing by newness driven incremental in

And challenging. in remain electrics, care bedding our business, legacy within home and kitchen floor sales

efforts by and increased messaging. brand are this driven we introductions our innovation, optimistic that season However, traction gain will new a holiday value stronger

brand in efforts stores, a new new highly which at kitchen floor bedding launching and bath Our all price-sensitive promotions and in electrics, assortments category. targeted private include care our is compelling

to and the that So key our performance, our to identified aggressive areas taking have reverse summarize, sales action of declines. business the pressured we have are we

while continuing areas, benefit XXXX. our improve initiatives, benefit the to with trend in accruing key expect will full starting fixing from We these QX overall in that growth sales

the growth in in business Now growth are let me provide an update that made and serve categories foundation we our going drive forward. have as progress going to the QX a key for on

QX, was first on Comparable Sephora, beauty compared acceleration strong XX%. basis with increased in sales continued sales as deliver X-year X%, to to total the with quarter. second which increasing which beauty a Starting an growth

And & Skin strong growth. drove Sephora Body and brands, Bath solid especially were the including quarter. Fragrance, and in Collection Care

are driving growth. to we ahead, Sephora strong confident ability in continue our Looking

gifting and XX% our this opportunity X,XXX For than last assortment, Sephora will and we holiday, our we significantly year's to key than on be building a capitalize as holiday, success, cross-shopping more year. in expanded off of see have last of stores more

Now me underpenetrated and an on our Care. our provide business update in Home the building in let Beauty of Gifting, Decor, progress Impulse categories

continue sales build. from these QX, categories to In

year-over-year. And of a as such everyday home storage, highlight takeaways. more In art pets. we sales solid many also than growth increased glassware business, few XX% me seasonal areas key our other of experienced and wall Let and across decor our the

queue we of stores in expanded more as quarter. Impulse, than to XXX XX% third drove more In growth we sales lines the

expect we with holiday enter of queue season lines strong growth the in stores. continue XXX We our to as

shops QX. Babies during and to I'm in share online XXX of that successfully And happy launched "R" we our stores Us

women's. with reach families and our are shopping requiring categories, younger that new broadening Kohl's children's, are including to We young customers multiple accessories

Us are "R" Babies a registry in introduced and also thousands register. of early seeing expectant We others October already

expect more coming baby as business in in our registry to grow as these to to years. Collectively, benefits we we see significant the a continue years. We representing gear shops builds, the underpenetrated open we coming sites recognize continue the categories from opportunity awareness as

growth our are high-teens represent expected Together to percent a and key rapidly with categories Sephora, runway of are growth. and growing of today, they long the business have

holiday to I'd Now we different. and providing great year no the is season. Kohl's known this like how value, holiday will share be for are approaching

and will categories expanded sweaters, bedding a compelling points and products Sephora stuffers QX. and as price to like fleece approximately from and weather well will destination businesses points, increased by in across gift as QX brands such benefit as basis stocking home as compared and We to key X,XXX jewelry at ourselves of growth our with outfitting, key penetration selection in establish continue cold results holiday jewelry toys our sets, gifting apparel, seasonally like Importantly, toys, as box relevant an

From targeted a leverage amplify marketing engagement. rewards, drive perspective, and Kohl's engagement influencers cash and we offers to social will media and deliver

given holiday this competitive late Thanksgiving. expect We highly the will be

will be days. big the maximizing on focus Our shopping

improvement As a are it more recent relative sales QX to our to off to performance, relates November marked comps.

solid as we in inventory. initial have private from the We the have investments benefit made fall our seasonal well as demand seen brand

start the we have addition, holiday. customer seen during heightened the to engagement In

still a us, front executing holiday of remains That we great customer are and in on said, a experience. lot there shopping of focused

will focused Before a expenses we on it highly to work year and In remain it I management. also to of managed over Jill, want stabilize to as QX, our we last sales highlight ours turning to X% performance. expense compared down remain priority that we

and meaningfully In a we remains addition, significant our this moment. sheet position which balance in cash generation solid in drive QX, a will in will by our Jill share reduce to revolver expect year-end. on more flow balance

things. today, comments my I to you summarize with To X leave want

have to continue strong reposition we for Kohl's growth. future conviction in First, our to ability

in So recognize that we moved too areas. quickly some

on categories we in increasing lost and improving driving momentum through in traction. focused receipts sales regaining private our traffic, brands are apparel We where

Second.

at growth they continue Our of customers, this Gifting areas as in continues we deliver build penetration. all investments Kohl's key deliver business and positioned drive season grow in Care, growth Sephora new Decor, bring Impulse, continue to and Home results. to in holiday our are solid and to which to strong incrementally sales in Baby

always this the year, for important And more our holidays gifting And been third, an deliver value have we time will assortment. through Kohl's. even expanded

While we positioned be from our and highly perspective product expect sales to well marketing improve the competitive, are holiday a trend. to we

stores a will us across the a of to Jill? our successful associates Kohl's for to over hope visit efforts listening get I our today for all I want weeks. organization season. to thank the holiday chance position coming their those

good everyone. and Tom, you, morning, Thank

call, as well quarter our an on will XXXX today's fiscal details For additional update year results provide third as our I on guidance.

X.X% decreased year. while as has X.X% remained QX year-to-date. QX last sales and improved, and lower basket and were in average conversion down transactions are sales our to In Comparable in X.X% down, QX, X.X% Net size year-to-date. declined compared declined

is than quarter, sales X.X% slightly both Other our decreased the Other year. Digital better down was Year-to-date, which were last which business, quarter, expectations. to so in sales our store revenue the in X.X%. credit declined revenue, outperformed primarily

the P&L. Moving down

and by management XX.X%, freight promotional gross digital last offset activity. XX penetration basis XX.X%, an increase points. lower quarter basis margin versus by driven was year. Year-to-date was points Third The increased gross was higher partially increase of margin XX up expense, inventory and

from SG&A store-related to Depreciation in quarter expenses. the down X.X% million, in expenses especially have compared benefiting given managed in year. SG&A billion $X organization decreased sales corporate last expenses Year-to-date, QX, $X.X declined year. $XXX to the last from million X.X% tightly was decline, expenses across and expense the

in was year-to-date Year-to-date, $XX $XXX ] related year. Interest primarily expense a was On million [ decreased is million. down depreciation million basis, $XX prior to outstanding. long-term down debt year. last $X lower million million from $XX expense decline million, $XXX to the quarter, the to The interest

net earnings Net Year-to-date, million diluted share share was income quarter $X.XX. the income per and and $XX diluted $XX earnings for was per was was $X.XX. million

quarter and of last year, inventory Moving the the to of flow. QX down equivalents. at Inventory balance end compared We and was X% on sheet million cash cash quarter. X% on-hand cash down ended with end to at $XXX the with

the As with in-transit our are inventory Tom end. better indicated, focused on which we quarter our brands, inventory reflected balancing private levels in in increase in a renewed at is XX% emphasis

We efficiently adjusted Year-to-date, use a remain while turns. cash of flow million, managing cash $XX inventory with highly free year-to-date $XXX increasing goal focused was was flow of the million. on operating

of the driven fewer expenditures me $XXX priorities. our Capital let year, million, less couple by on Now Sephora touch than capital significantly a million year-to-date last openings. allocation were $XXX

queuing Us shop including openings, in new lines, X launch Babies XXX consisting Impulse XXX "R" of still are shops of XXX openings, XXXX store and investment the a approximately We X million relocation. $XXX planning CapEx of small

this business, year. After with the ended retirement the shareholders and investing capital returning than attributable year's $XXX the was with revolver. XXXX earlier of This increase to balance strengthening May on priorities. also to $XXX bonds our remain sheet balance in We higher million the top last QX revolve of largely million, the

and remain We generation balance significant this QX our further focused down flow in cash on front. efforts and expect our revolver position rebuilding paying on to cash

and them July the ahead, given XXXX will rate. continue favorable to monitor closer coupon likely to our the respect Looking will with to address options we notes maturity

distributed disclosed, November QX, we payment at dividend to declared our payable current share continue to dividends quarterly for XX. our In on of $X.XX December as million in dividend Board we on prioritize And to cash of levels. shareholders. the shareholder shareholders returns, previously $XX the As per a XX

on me outlook let detail some Now XXXX. updated share our for

as stabilize heard this actions our to sales we you for trend aggressive Kohl's As future reposition growth. we taking are morning,

As intended and the time deliver financial account a take our outlook prudently, our our for taking to outcome. it performance year for result, into approaching are will actions the year-to-date we

we previous the to decrease versus sales of of net the X% of For year, the an XXXX X% to compared be full to guidance to of range X%. X% decrease sales in range range X% our decrease a be a a a to currently as expect to Comparable decrease. decrease in X%

Our previous sales guidance a X% year X% comparable range a decrease. full was decrease to

to full year. a sales of an decrease decrease. quarter, digits guidance the For in the comparable for revenue fourth X% Other X% down to implies our is range be expected mid-single the

of points of down the We be a compared for last XX the end expect to to basis to dollars compared guidance our guidance X.X% our for year. to margin to expect high as year. SG&A, to at be now for year previous X% And we the gross of as previous SG&A to expansion X.X% XX X% decline

We expect EPS to range $X.XX. to our $X.XX guidance guidance be in operating to the of of of be to X% $X.XX range to X.X% and of compared prior and compares to our range the X.X%, $X.XX. prior margin to This X.X% to as in

With this that, to are at your time. Tom and questions I take happy

Bob from [Operator line Instructions] with Guggenheim. comes Our first of question the Drbul

luck of years, the and for last and the back. actually on all few years we your many help Tom, best over go retirement thanks

Thanks, Bob.

questions Two for you.

to look QX, you will at think The 'XX? first you your but the you I into think in also traffic, lay out, trends, one, do ones the impact that aggressive just the traffic I guess, be when which actions biggest

if this and fall thought card, the the an trends, you you it that And us the some into heading in way terms would holiday? just conversions to the and of then the second question terms it's give in on actually is, playing update can just Jill, of credit of

we're in went showcasing the already bought that increased traffic key selling is great I the have there values. and driving Today, and product we all, of values that November really at some the think really, really for floor. seeing great the first Well, out merchants really on great

So really showcasing that.

do year really third quarter. We've We but what based heightened that gone customers. it the a this our have really engaged multiple year, on approach happened in most targeting we Also, over every times.

in really quarter. didn't We probably that's the that enough do think of I important. third

more distorted the mail. more quarter our direct through we and offers fourth in it So in efforts targeted

as rewards to digital acquisition drive think into that's the important. So have. members we that X leading social new leverage really to We're million going customer trying be marketing new to really and well

think really and Jill? the things those in I increased that have So drive fourth X quarter. will traffic

Bob, And Yes. in by is performing that of where of the softer weighed we obviously terms overall quarter. credit I sales think saw for the credit, down we kind expected

We to a are seeing how which bit revenue are payment our of starting anticipated, set little we all come line expectations. rates you but other think which in better saw drop, we I than

benefiting we a did co-brands. the As in fourth from our bit mid-September. go little start co-brand we'll into We quarter, launch

kind just cards as So mailboxes looking those were in in October. getting we of were

and So a predominantly going QX, that interest but coming it's the you be benefit more to really into a revolving XXXX much by spend, time see the us. portfolio, they for

that As But and think interest we see out year. expecting we're the those get to customer in mid-single-digit income we it close I numbers. revolve the balances benefit continues we use it, to range the as be those of

performing year. really expected way the to we So it this

Mark with the Altschwager of question next comes Our Baird. from line

aligned investors terms the changes with should are element is of now disruption strategic periods time bigger now bracing in the guardrails transition? to through of to have of be lot or I lot some in the place A for limit some been right right be a this strategic making. torch? First, And of changes on in what you in the ahead? the you've guess, successor the your year is the passing Tom, the why balls agenda

answer the somebody. of the of Obviously, be what up spent me. obviously years be first: the X now. he'll will in not strategies would Board modifications aligned time of that always, Well, the for very And in From some put X in lot our and time expect. And there transition. Directors, much and help XXXX. right part the place a and last we changes I in May signed his company with want on the years. my of to strategy an terms would there Ashley is you as -- with came exact with out in have it's hiring science He up fingerprints I timing, to

overall. come are and the fortunate to this the We out have Ashley join And is decide to way us. timing worked

the the do team any sure have was place, good terms that's and issues. guardrails isn't significant timing it So came it in just big in about, But making felt that we of to a and now. how there we is best that

you do want on Michael, think, to in this? weigh I

both -- his here. add Tom's on markets sure. Yes, here. just Yes, it's And about Michael Bender tenure to comments to

has want first discipline. we Inventory reinforce we've the past the new how the So things of to in business. a number about of in of said really business. He's I announcements discipline, over years-or-so brought merchant to our all are He's all, about grateful done brought Tom role. brands to of what his what couple positive

So that we're impact about the had. has Tom excited

knew time-based the far year. with starting As expire transition in would mentioned, of him had, agreement the goes, that May XXXX as Tom that we as we next

engaged what a very in robust it with succession as Board, felt and so the talked Tom was we we process. we And about planning

CEOs And strong to really are as not hard -- are know, find. you hard

adviser, made we that able in Ashley when to and move can timeframe We're an that Tom as and on allow we've member said, that pleased transition staying a so for And availability ideal process. with start attract Board date until the orderly an to will as he us identified May. the an January to him sense to to of business mid-January, the as continue Ashley with were that candidate,

the and brings him place specifically sees got against. like feel in in a we Ashley board the that to that solutions he excited Board follows that as knows about change are I bring then customers, what to what bring Tom we're several that, strategy, and we like in about him plan we've question things on What he mentioned. want So what mentioned, and we data around to executing and out the follows close him them. the customers He agreement brought

both experience in that as running as his Walmart. of evidence Michaels well There's

Ashley digital is He's and from part important demonstrated into settings, experience. understands has expertise to knows deep drive efficiency how that physical making merchant, the a so great have positively product. of with got digital which business. obsessed the how standpoint customer an an Kohl's chops experience that he a He's and integrate is customers and and sure to

at Kohl's knows to X,XXX stores. is He how operate scale. a big business, so over

So the lastly, that it's is for that standpoint, say have a to operate to important of And us Kohl's chair leader would principal people. scale. important team inspiring how we sitting is And understands someone our the in continue maintain at I to Ashley with a of then at have evolve. really from felt that. here feel and Ashley, members comfortable all Board And culture to grow for the and and us really character

about view mid-January. a information items until in requests has business, and getting business checking a been already our digital He's a the of been for number and our stores. of doesn't that point out. online He's although of He's on excited started about he developing start by ordering number

as period, to role. able we'll balance feel through we the be the that So sure focus strong. stepping good about X move we excited into be weeks on while Tom's progress continue And will to who's in the with we these that holiday support making next X of we someone the transition, make to have about

offset the the into fee us revenue? run a revenue spoke Jill, imply know was there guess, which due as that, that rate to be just doesn't the the for existing happen to if rollout. all through the follow thoughts change I current upside to Thank detail. co-brand could thought wouldn't credit, credit credit would we I change look could a about I late pretty stream, significant the that material co-brand contribution up late significant briefly we of fee of be current revenue initially, when you why change thought Can if an you pretty you result the to in XXXX. walk on

Sure.

customer, really from reach co-brand, think credit didn't have want younger decided to was pocket. the card to know co-brand. to really in label launch the their It private I we So we when which a

loyalty a this them in their evolve could Visa So continue with it new a we is the our do through wallet. but that to product let card, card

much benefits benefited a because driven more balance the walls fees. one off versus of run a poles. you fees interest of some card interchange of Obviously, late And obviously, outside can it's of you was off also the that we of the to from bigger X that then use

So risk any be there benefit up having from if outlined the legislation, do not regards we to would end the co-brand. that we've that in

customer's and bulk more those coming revolve a start as that, balances shopping that you're we benefits course, the them XXXX. before in having to hands, with Of QX, will flow of of going some There would be but through. through the be to lot in it get stated, in really need seeing revenue get that card

and guidance our benefit lies that that approach we that as think, the throughout of legislation kind include, really XXXX, I year. a launch, would nice co-brand build So and look you we'll where from at give would

best holiday. And luck of Excellent. over

Mark. Right. Thanks,

question next Cowen. Chen from line the comes with Oliver TD Our of

the a lot things new consequences brought environment? unintended you of and agility to Tom, including would issues highly the changes relative of the constructive organization, promotional of around some categories. competitive speed, these you How diagnose

comps. trying on And what's been it's you're and replacement, And need quite your core done positive as terms also the that forward, younger sustainably fix take to get CEO then and But the in be well. fixing didn't of of apparel second, that may understand in strategy as a multiyear I lastly, that to issue customers terms looking we terms what coming? forward embracing comment [indiscernible] to of new the core, in undertaking, look

the exclusive the that First issues again, one and between the goods, that of private obviously, fact under-placed brands, one how sure on brands. need to brands. was in of We brands. the terms of we of -- we're market have would put approach I unintended we turn pressure all, that We to say obviously, our placing realistic consequences was much too we're the balance private our right the that of put more the had. make biggest we private that the

we could less, us. thought a that for lesson big learning -- was work us, obviously and We was do It's a which in more just for with didn't mode, consequence. and big lot out the we're unintended that

all have overall. think from that learned I of us

we through, we on gone ratios through realistic approaching much sure have So XXXX, being making important. gone putting of in terms pressure and vendor that ensure too right reduction aren't much that very we're we're carefully any the already very, more that's to it. We've for the that how we've matrix of brands, the receipt

As we we far if when they're exclusive our to on using which, upfront versus more our of open-to-buy sure making versus chase it want in do exclusive know the correctly, goods buy replacement, to to checking which brands. that, replace weigh and that? as to things much open-to-buy private aggressively failed any our and with I that our we're don't like had to need after resulted issue go utilizing We you that obviously, just in private brands.

Yes.

really really exclusive but that there. we those to was so inventory, excited XX% price the trade-off And market over was in and brands down a I unintended think there we're private are point. saw, and get Oliver, trying tightly thing the about opening that brands, brands. manage are our the biggest of became some were you consequence Unfortunately, we also

we're price having And customer, we our for so in that to brands disappointed wanted point. at value when opening not this drive looking

And headwind so a overtake. needed that to that we became big

really that we actually we down And they're You difference brand. the ownership setting, our They saying we're X%, in is proprietary which numbers, are but of transit, in on our saw were were take inventory of we X% and down we hand. speak. as

as of of saw brands first some hit. So November those we we couple weeks the in our of pan proprietary newness out, saw

we results. We're we that one the to to seeing market great November I think the led And took sell-throughs. that referenced actions are that of improvement those our

seeing a just benefit we're something import time back So we're length that. it, terms of it into But now the that the was get that from definitely to a in in while process. given of takes

this mid-single in answer core but during staying little inventory think more So customers right drive really that, is just digits I those managing continuing brands have really bit think discipline close our more down to than to to fashion to bring true we that want discipline. of staying is and our have pyramid the churn the in to We using market we that did and brands element the a QX.

question on Okay. sales growth What's it relative in for guidance, et And to inventory merchandise on you're does say light some the guidance embedded seeing promotions? you inventories? of need quarter-to-date, did And to cetera? margins and assumed what you promos. Jill, that what to relate do what final in for the to of

Yes.

table. going down the it's inventory, the the balance run to we'll expect with getting for to, think think we're to less the we best still it business. brands but we of market that We're digit, brands I mid-single where spoke on that's into proprietary back the like

to be year, that's place feel going like what to the that's forward. the running and expect right would as end So we be we business I us the

we to, our improve we turn things quickly have as as do in learned doing approach year a to that. opportunity going we're we large but in that paced maybe spoke too so lesson We do this our a don't to

It QX. margin, be expecting is of we terms it are In promotional to promotional. always during

do that. set to we're So

think well of is worked doing that the found us through years a we things couple more targeted of for last offers. couple I

particularly most our just drives did Tom It that customers. definitely QX. around mentioned, in as loyal behavior, So we our

that, know their value. and we that's a So them to behavior for see drive us have way

proprietary with we merch margin. obviously thought the our inventory expect which in we're making, a carry better to than QX better investments do do that brands much We

for what the about margin QX. little we think we So think a end in terms why QX, has that's saw in step-up the QX guide to of get the we can we a high imply year, bit our which would as of for of

from a And a QX clearance. is then last, in And inventory position typically just big order clean we're perspective. from a an

that be a expect will us benefit do we for as well. So

confident kind guide of to of kind we the the in are giving year. pieces those the the the the So together put feel on margin of puzzle for

comes line Gordon of Grom Our Chuck with Haskett. next question the from

of everything. couple customers some of Good the that talk hard deemphasizing big opportunity; other it's on the steps counters? guess over years jewelry very you X recapture the to to guys I the luck, about just the sometimes have and a it's hand, Tom, past Can on the lost brands alienated may you with by private hand, do.

Yes.

I In think come marketing. saw the what year. do seeing a little this of you're QX, think SG&A, to a math for the SG&A is investment guided and going down year, bit, investment little the our you for run pretty is an tight we we've come to in bit to going Chuck. I if marketing, into -- SG&A maybe that more And a in

the we we holidays that to our So our the have. store new value see when we best attract it's customers know loyals when most the

So going you're lean to that cash. going see Kohl's we're to into

right now, ] that [ seeing XX I you're which customer. particularly with Cash, loyal of think resonates XX our iconic really most Kohl's

and bring So to that continue of type something show them that those we lean offers into leaning so has value drive into to consumer work targeted can events, in have see that we and been behavior. we we

reacting those And only going have that not react to back and is we and and fine their do going digital feedback, and to the particularly back perspective, to not they we're be but social heard stores direct direct going going attract around counters them, to who broadcast know back it. go then what, jewelry a disappoint flyer really into to new we're in have and and your and it sure in stock, them lean from make know tell have we those mail jewelry we're we're XXX to in them, we've mail customer we guess customers to we're to and

in a on think positive jewelry bridge I QX, and in mentioned we the had fashion actually we've call our comp.

So it, to we are on and well. the that message think QX can as to out we build in starting we get and is that consumer reacting

petites. then And

that back that I substitute in. a area [indiscernible] just bring petites. was a [indiscernible] think not unfortunately It's miss that's another

can that's we market assortment how going that in customer have QX. into so have that ensure we're that they we back is more was who And able that and so we and really to we the our a stores in, marketing these it reach to targeted they're be and make QX that through back and know to to deal, find going that when in, loyal they to them to sure trip a in investment big that come going in can big assurance now offers of us, bring make a

which guess particularly you a remains product like tailwind Great. the new the comp could on strong, in stack X-year improvement. marketplace Okay. that I offerings, moderate. then there's said, Sephora mean And I concerns that,

discuss a store deceleration? that So product? to I can guess, purchases when across you've And what's the you made any the on cross-selling potential Sephora game improvement plan offset somebody

Sure.

so we're Sephora. first, think I excited about

I the X-year you because stack. this like that's That was think why we lot. did So Chuck, actually a I for know just those metrics. one like you, I

we're into large it, opportunity in Our was go they for for fragrance and that. going really as can us, imagine, customer it's outperformer Gift and and keep a coming loves in we into as And gifting back it. you an QX. QX, lean to

last doubling down that We our year. this on had year. boxes great success with gift We're

it definitely less comps as opening, is work. I But will stores Sephora, And exactly have So think, new right. have we to continuing moderate. the you everything

opportunity drive Our biggest is continue that shop. to

think continue lot we change biggest to shop. but opportunity. that the see not There's a I the of there, And remains

store to product, point which some then loved. particularly them. is like with for didn't the opening is of price We we fashion juniors, that brand having being moving some a front of think disrupted the great not our product our it that of and I products, that the have has

change saw the proprietary step probably more impacted much our areas other brands. as we was Women's, through that biggest than

to them invite the again. product bring to need we So shop in and in then

It's "R" at as stores We're continues earlier the that Babies younger think really in is in coming resonate time roll we the customers, out. brought customer. we're a that diverse serving in into. a moment, to their that much thing and that third more younger with I families Us seeing them

excited And our have that about of launched of in really seen. the we're October surpassed we've It registries the registries expectations. and just amount amount

we in of coming us So well. know sales all that's front as

metric a have the that before head, it back focused in but have shop, the So they things on on things it, hit move. will I want we get opportunity we're the know that come that we to they've we for think us see big stock on but you cross to and in definitely probably

Okay. Great. me. for X quick And last X

is weather, historically very the and weather-sensitive. But been remarkable. always Just we've found your which XX minutes, pretty nobody talked has about business has

warmer way back any months? the temps to much of of handicap there past your sales the were from is how over So held couple

been like QX driver qX. for in #X correlated always has sales Weather impact huge Yes. in the a us. It's

Our fall average. our company seasonal below were well

the significant Yes. We fall-related had in a product third drop quarter. in

impact We quarter, our business are us. things hurts we're such and the build That's haven't But it so do, really to fourth a build you we us. while reason yes, quarter. news trying it trying When beauty business to that our in third it is weather. us did on looking knock by talked continues about is, apparel and good it home at footwear, negatively all not year. of it, wood, last the The high hurt colder negatively it and to than as but weather, the have as penetration the be X we're why impacted

would part thing, when Tom into And the Yes. selling QX. the market of and of seasonal apparel cooled becomes just a tailwind that I And definitely it positive is other focus been off, say improvement QX. has that mentioned, fall less started in as a

as So initiatives into as our penetration really a a go we gifting, bigger holiday period of the lot home, well. Sephora around become of our portion

the with from comes Group. question next of line Dana Our Telsey Telsey

could it macro how to the factors? and be? where that you big a . happening push of button that now, can would X of you about of be what's is think view say, Tom, internal over picture much we you something, if How much accelerate was As it would time? And are what corrected

impact Well, has impacting One customer, with We with did been saying squeezed. consumer as that our lower-income been all in along, macro cetera. button. overall think the everything the us. had we've inflation, et that of sales was terms them I tough Obviously,

of to don't I fix it of macro to happened, if of kind in overall. total can that we know offset things put to us. assortments and We our numbers fixable, hurt I to a don't has product should be think improving that that in any We think there's the general. fix. know, issues that And most everything. We terms marketing. work able easy they're

going on feel for I it's But business continue into if terms the to quarter of that But all now if in a we're to have place things really put us we of able can some but should to our all efforts be feel the good business, we'll good we of that business, we've And in to macro-type in can to up business we our can fix we're have. in a home done, we've terms in cetera, try good we it. our right to of fourth always seasonal gifting, impulse work the build because our business, execution, think we We place. that et be continue feel capture execution, we issue. sort to

as year season? on this the managing go about Jill, the through expenses, to labor you're And so last and puts we anything that takes of cost year thinking compared you're how carefully, given

Sure.

also to we you touch process and saw in, has the as phenomenal we managing obviously, have expenses, markdowns. well management inventory not model clean many to a think great as units I really done based on inventory to benefiting having variable from less our job coming see take when out having a stores our called we that sales as

to So that I during experience have want a for would holiday. sure make say customers we great we our

the pull can store, a see have in that we So we're going also when will to in we have that model don't we labor that you but back invest

key everyone say place our marketing. an to area, I management. just this lean pull back will expense across we perspective. up really terms we of to expense shown to all But one the that's sales like think a of, is that lines there, The hey, So mentioned, in been I would back in QX, I weren't be into from will pull need contributor

petites, to cetera. We with see with one that of have fine an you'll opportunity year customers the into et beginning exits some that's think I from the that QX. disappointed change we the part So reengage know the step the of we jewelry, of

we So them that make to we have need aware it.

as make know continuing with year really value they as to loyalty that people drive as and aware that into build proud on need our can sign-ups to seen We bring we've can new that had, we're well [indiscernible] we million all growth then QX program, but well. X that we find tremendously and the them we've customer that during

Citigroup. with from question Our comes of Lejuez the today final Paul line

Just of couple bigger a stores? about What might space? to a of quick share? up Curious any ones. bit you in petites, differently of closing jewelry, you retailers taking where thinking giving Second, you're floor the be in a brands, might are think way, if private what what might terms And again, other curious feel pressure? as then little you be customers you moving get into

the with closures. to going I'm start Okay. store

you store talked cash generate a of lot from stores. of think our base. about know lot I we've always We the our a health

have always are hygiene We that mall, at. to which locations I we'll from our optimize always that luxury a would Paul. always look been in say -- And With being fleet have going said, think consider the would helpful. off and I it. places definitely moves we're evaluating more that we're you're has I convenient that there perspective, to But

But over cash XX% X-wall of positive. still our stores are

underperformers, some the a us periphery address it. make be But to do. opportunities to perspective, going it's those hygiene from we So a financial decision which will difficult obviously, for to there's on

brands, In I also getting of we've about, have lot think make a private we in the investments floor we talked of terms back space. up when space

feet. XX,XXX other up without space. over able in is been store really Babies give to bring average brands having "R" to and We've Our floor some square Us

doing brands a we private brand. I a of the think market this case were saying our is lot replaced we where of instead with

space floor to private but there our going we brands, anything just really give we're so And back have to isn't having come to up. into dedicated

in there choices space fashion It the in, own because we of is it brand. replacement proprietary brands. We'll will that out a making we market have don't ever box a faster a just floor bringing like more been much get in be today. really versus think have feel still we the But I

terms of customer share loss. in then And

think being continue Obviously, down. to we monitor I it.

I going there. the numbers it's of out that seen think put you've their to a lot winners

gets it think I spread. pretty

whether off-price, can you be see cetera. it et across So it Amazon

trade-down I that happens as think there's well. a typically

from and our customer know income demographic, than faring income better doing we lower upper our So a customers. customers are

they value, that you to discerning as can't finding which opening not other why, we afford alternative, have much brand become buying they their again, they is where, options an obviously, proprietary quarter, either or this get more and point in didn't have down to marketing much when there yourself found So in price that's store, purchases, they're because and them them the inventory going great which see out we're that particularly hopefully, Paul, place, that a bring to you'll once already, back find in, if we double is after it'll sweater. to the you go can in

Thanks season. a to Thank everyone listening on today. We the call you you. holiday wish wonderful

This will conclude for all you your today's call. Thank conference participation.

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