COVID-19 has derailed economic activities worldwide. In response to the pandemic, retailers are either shutting down stores or trimming work hours. Incidentally, several retailers have chosen to withdraw their guidance, unable to ascertain the possible impact of the deadly virus on their performance. The latest to join in the list is
Kohl's Corporation ( KSS - Free Report) .
The department store retail chain has shut down all its stores — roughly more than 1,100 — effective March 19 till at least April 1. However, the company informed that shoppers can continue purchasing 24-hours a day via Kohl’s App or on Kohls.com. Further, management highlighted that the company will support store employees with two calendar weeks of pay. Well, this move has been undertaken by many other retailers.
Luxury accessories and branded lifestyle product retailer, Tapestry (
TPR - Free Report) has temporarily closed all directly operated Coach, Kate Spade and Stuart Weitzman stores in North America and Europe till March 27. Athletic footwear manufacturer NIKE ( NKE - Free Report) has shut all company-owned stores in various countries like United States, New Zealand, Western Europe, Canada and Australia till March 27. Talking about restaurant operators, McDonald's ( MCD - Free Report) has closed dining areas across its company-owned U.S. restaurants for the time being. VIDEO
Coming back to Kohl's, the company withdrew its recently provided guidance for first quarter and fiscal 2020, given the current situation and its unpredictable impact on demand for the merchandise it offers. (Read more:
Kohl's Stock Up on Q4 Earnings Beat & Dividend Hike)
Management also informed that it is altering fiscal 2020 capital allocation strategy, which comprises curtailment in capital expenditures, temporary suspension of share buyback activities and evaluation of dividend program. However, the company stated that it will pay previously announced quarterly cash dividend of 70.4 cents a share on Apr 1 to shareholders of record at the close of business on March 18. Kohl's further revealed that it has fully drawn its $1 billion unsecured credit facility in an effort to improve financial flexibility amid coronavirus crisis.
The coronavirus outbreak has wreaked havoc denting demand, hurting supply chain, slowing down production activities and temporary closure of brick-and-mortar locations. Certainly, the retail sector remains under pressure. This was clearly evident from U.S. retail sales data for the month of February that shows the biggest drop since December 2018. (Read more:
Retail Sales Fall in February, Brace for More Coronavirus Pain)
Shares of Kohl's, which carries a Zacks Rank #3 (Hold), have plunged 65% compared with the industry’s decline of 62% in the past six months. You can see
. the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here Today's Best Stocks from Zacks
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