Kohl’s stock jumped over 30% on Tuesday morning. That extraordinary leap represented the company’s largest trading day since January 24, 2022. In the face of falling sales and a challenging competitive environment, their stock price has tripled. That increase comes as the company pivots to a new strategy under interim leadership following the departure of former CEO Ashley Buchanan.
Retailer Kohl’s is expected to have sales decline instead by 5% to 7% in fiscal 2025. Similarly, comparable sales are projected to fall 4% to 6% over that same time period. These rosy projections arrive as the company finds itself reeling from increased competition from traditional retailers and e-commerce players alike. Despite all of these challenges, Kohl’s stock skyrocketed early on Tuesday morning. At one point, regular trading was even halted after a spike in erratic market behavior.
By around 11:30 a.m. ET, Kohl’s shares were trading more than 30% higher, with trading volume nearly 17 times greater than the average over the past 30 days. Speculation interest in Kohl’s has jumped in recent months, fueled by speculation about possible takeover bids. Yet the company has been the target of multiple activist campaigns and appeared on more than one bankruptcy watchlist in recent years. With nearly half of Kohl’s outstanding shares sold short, there’s no denying the presence of extreme bearish sentiment among investors.
The leadership vacuum left by Ashley Buchanan’s abrupt departure has only fueled the uneasiness surrounding the company. Buchanan was threatened with expulsion over a conflict of interest scandal. In response, the board appointed an interim CEO to address the company’s immediate crisis. This new leadership transition puts even more pressure on Kohl’s as they work to both right-size their operations and earn back consumers’ trust.
Kohl’s runs an expansive retail footprint averaging more than 1,100 stores nationwide. Not that the company doesn’t face formidable challenges, as it now requires to navigate a changing retail landscape that necessitates diversification and strategic nimbleness. The surge in stock price may provide some much-needed momentum for Kohl’s as it addresses its operational issues and positioning in the marketplace.