By Anuja Bharat Mistry
(Reuters) -Kohl's CEO Tom Kingsbury will step down after less than two years at the helm, paving the way for former Walmart (NYSE:WMT) executive Ashley Buchanan to take on the role as the department store chain looks to execute a turnaround.
The company announced the transition on the eve of its third-quarter earnings report, noting that Kingsbury will remain in an advisory role and retain his board seat until he retires in May.
Kohl's (NYSE:KSS) shares fell nearly 5% after market close.
The appointment underscores Kohl's latest attempt to improve its financial profile. Like other department stores, the company has been struggling with patchy demand from bargain-hunting customers while spending on trendier clothing such as wide-legged jeans and logo-free shirts.
When Kingsbury was handed the job on a permanent basis in early 2023, Kohl's had been struggling with high inventories as customers dialed back spending, forcing the retailer to offer big discounts to clear their shelves.
Its beauty products partner Sephora, however, has been a bright spot.
Kohl's said Buchanan improved profitability at Michaels Companies (NASDAQ:MIK), a specialty retailer of arts and crafts supplies, where he has been the CEO since 2020, and grew its digital business while simplifying its merchandise strategy.
Prior to Michaels, Buchanan was at retailer Walmart for 13 years, where he held a number of executive roles including chief merchandising and chief operating officer for Walmart U.S. e-Commerce.
Buchanan, who also sits on the board of department store Macy's (NYSE:M), will be the third CEO of Kohl's since mid-2018.
Since the company is struggling and in the middle of a turnaround plan, a CEO change right now might not be ideal, said David Swartz, senior equity analyst at Morningstar.
Kohl's shares have lost more than 40% since Kingsbury was named as interim CEO in December 2022.
The department store chain's net income is expected to halve to $30.54 million when it reports earnings on Tuesday, according to data compiled by LSEG.