Kohl’s shares fell sharply on Tuesday after the company’s earnings fell short of Wall Street estimates and after the announcement that CEO Tom Kingsbury will step down in January.

The weak forecast underscores an uncertain holiday season for retailers, which could prevail in favor of competitors such as Walmart and Amazon.com as customers increasingly seek bargains.

“Our results did not meet expectations and we are frankly disappointed that sales were challenging for us throughout 2024 and continued to decline in the quarter,” outgoing CEO Tom Kingsbury said in a conference call after the results.

Thomas Kingsbury attends the KIDS/Fashion Delivers Annual Gala at the American Museum of Natural History on November 5, 2014 in New York City. (Thos Robinson/Getty Images for KIDS/Fashion Delivers / Getty Images)

Michaels CEO Ashley Buchanan will take over the company on Jan. 15, but Kingsbury will remain in an advisory role and retain his position on Kohl’s board until his retirement in May 2025.

Buchanan, an industry veteran, has led Michaels Companies since 2020. Buchanan previously held executive positions at Walmart and Sam’s Club.

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Kingsbury served as interim CEO after former CEO Michelle Gass was tapped to acquire Levi Strauss & Co. in November 2022. Kingsbury agreed to remain Kohl’s permanent CEO through 2025.

Under Gass’ leadership, activist investor Ancora Holdings Group put pressure on the company to replace her and improve business performance. In 2022, the company wrote a letter to the board saying the retailer needed leadership that would implement a precise turnaround strategy so it could begin creating value for shareholders.

Kohl’s Cash earning periods allow customers to earn $10 in Kohl’s Cash for every $50 spent. (Scott Olson/Getty Images)

Under Kingsbury, Kohl’s CEO Michael Bender said the company is “undergoing a transformation to expand its product portfolio, enhance the store experience and improve its long-term financial health and profitability.”

Activist investor calls on Kohl’s board to oust CEO

However, net sales fell 4.2% in August, and sales at stores open at least a year fell 5.1% in the three months ended June 30.

At the time, Kingsbury said the company had “taken significant action to reposition Kohl’s for future growth” but that its “efforts had not yet fully produced the desired result, due in part to a continued challenging consumer environment and weakness in our core business.” can be attributed.”

Among the issues the company faced, Kingsbury said, was that “customers were becoming more discreet in their spending,” which put further pressure on the company’s sales.

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Still, Kingsbury said the company’s belief in its “strategy remains strong and our operating discipline, solid cash flow generation and healthy balance sheet will continue to support us as we work to return Kohl’s to growth.”

Reuters contributed to this report.