(Bloomberg) -- Kohl’s Corp. fell sharply after reporting quarterly sales that trailed analysts’ projections. The retailer also cut its full-year profit forecast for a second time this year, exacerbating investor concerns about department stores.

• Same-store sales, a key metric for retailers, increased 0.4% in the third quarter, compared with the 0.8% growth seen by analysts, according to Consensus Metrix. Kohl’s now says profit excluding some items will be $4.75 to $4.95 -- with the new high point of the range 50 cents below the previous outlook. See more results here.

Key Insights

• While Chief Executive Officer Michelle Gass said the retailer was entering the crucial holiday period with “momentum” and is “strategically increasing” investment to fuel growth and customer traffic, the results are fueling concern. Investors will have to wait for the conference call for more details on these investments.
• Kohl’s has been trying to set itself apart from the department-store segment, which has struggled to adapt to broad changes in consumer habits, by using partnerships and smaller-store formats. The results suggest the company needs to do more, however.
• Kohl’s most prominent alliance is with Amazon.com Inc., which lets customers return their Amazon purchases at the more than 1,000 Kohl’s locations. Kohl’s goal: To get customers making returns to browse aisles and buy something.

Market Reaction

• Kohl’s shares fell as much as 12% in premarket trading. The shares had already dropped 12% this year through Monday’s close, compared with the 25% gain in the S&P 500 Index. Other department-store chains, including Macy’s Inc. and Nordstrom Inc., also dropped in early trading.

To contact the reporter on this story: Jordyn Holman in New York at jholman19@bloomberg.net

To contact the editors responsible for this story: Anne Riley Moffat at ariley17@bloomberg.net, Jonathan Roeder

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