The department store chain also posted a surprise drop in sales at existing stores one day after Macy's dismal earnings report rocked the retail sector. Fred Katayama reports.
Another downer from the retail sector: Kohl's quarterly profit plummeting 87 percent. And the department store chain surprised Wall Street with a drop in sales at existing stores. As with rival Macy's which reported a fifth straight quarter of declining sales Wednesday, shoppers just aren't buying clothing. Kohl's CEO Kevin Mansell said, "Until we get more excitement in apparel, it's going to remain in my opinion a replenishment market." Thomson Reuters' Jharonne Martis: (SOUNDBITE) JHARONNE MARTIS, CONSUMER RESEARCH DIRECTOR, THOMSON REUTERS, (ENGLISH) SAYING: "Today's numbers were very clear that department stores are out of favor. Because the housing market has done so well and because of that, the department store used to benefit from strong home goods. Today, Kohl's reported that home goods were very very negative. And this is a very worrisome sign suggesting that this might be the beginning of the end for them." Analysts say this doesn't mean that consumers are weak. They're still spending on homes, cars, and electronics. Millennials just want to shop a different way. Brinker Capital's Thomas Wilson: (SOUNDBITE) THOMAS WILSON, SENIOR INVESTMENT MANAGER, BRINKER CAPITAL, (ENGLISH) SPEAKING: "This is part of that long-term secular trend of consumers wanting to purchase online as opposed to going to the big boxes." Kohl sees sales trends improving in the current quarter and the latter half of the year. But investors aren't buying it. Kohl's shares plummeted to levels not seen in seven years.