Kohl's cuts 2022 outlook, capping mixed week for retailers

Kohl’s on Thursday slashed its sales and profit expectations for the year, a result of its stepped up price cutting to shed unwanted merchandise.

The department store chain also cut back on orders ahead of the critical holiday period, spooking investors and sending shares down almost 8%.

The news from Kohl's capped a heavy week of retail-industry corporate earnings, and the results were mixed.

Kohl's has struggled for years, and last month it called off buyout talks with Franchise Group, the owner of Vitamin Shop, citing economic conditions.

Americans are under strain from inflation hovering near four-decade highs, and that played out in the financial performance at Kohl's and almost every other retailer in the recent quarter.

Soaring prices have forced families to grow more cautious with spending, cutting back on new clothing, electronics, furniture and almost everything else that is not absolutely necessary.

Exacerbating the problem for retailers, Americans' spending habits have as the pandemic eases have shifted faster than anyone expected. After being cooped up at home, U.S. consumers seemed to shift almost overnight to spending on restaurants, shows or travel.

Those same forces have tripped up retailers that sailed through the pandemic, posting record sales. Both Target and Walmart released quarterly earnings this week and they too are wrestling with inflation and shifting demand.

On Wednesday the Commerce Department reported that retail sales were flat last month after having risen 0.8% in June. Sales fell 0.5% at department stores and 0.6% at clothing stores.

That has left retailers with huge inventories of TVs, stereos, laptops, and clothing that perhaps is too casual for nights out or work, forcing them to slash prices.

And because of inflation, there is...