A shopper prepares to pay for items at a Kohl’s department store in Peru, Illinois, May 16, 2019.
Daniel Acker | Bloomberg | Getty Images
Kohl’s has withdrawn its earnings outlook for the current quarter and fiscal year, as it grapples with the hit it will take from the coronavirus pandemic.
The department store chain will shut its stores nationwide, effective 7 pm local time March 19 until April 1, at least, to try to help halt the spread of COVID-19.
Kohl’s also announced Thursday that it has fully drawn its $1 billion unsecured credit facility to increase its cash position and “preserve its financial flexibility,” in the midst of so much uncertainty.
The company said it is working to significantly reduce expenses and built-up inventory. It has temporarily suspended share buybacks. Further, it said it is evaluating its dividend model.
Kohl’s “remains committed to paying a dividend over the long-term and to the extent it makes a near-term change in its program due to the COVID-19 impact, it would seek to resume its approach following stabilization in the environment,” the company said in a statement.
Kohl’s shares had rallied Thursday, ending the day up more than 10% at $17.18. But shares fell more than 3% in extended trading after the announcement. The retailer, which has market value of $2.7 billion, is down more than 66% since the start of the year.
The company joins a growing list of retailers taking similar measures to try to preserve their businesses, as thousands of stores across the U.S., including entire malls, have temporarily gone dark.
Nordstrom, Abercrombie & Fitch and L Brands are among the names that have withdrawn their outlooks, unclear what the future will hold.