Updated Nov. 21 at 11:37 a.m. EST

Kohl’s Corp. last quarter continued to yield sales and profit declines, but raised its bottom-line outlook for the yr and cited progress on turnaround strategies.

On Tuesday, the Menomonee Falls, Wisc.-based retailer reported that its net income for the quarter ended Oct. 28 fell to $59 million, or 53 cents per diluted share, beating expectations of 35 cents. Within the year-ago period, net income reached $97 million, or 82 cents per diluted share.

Operating income was $157 million in comparison with $200 million within the prior yr. As a percentage of total revenue, operating income was 3.9 percent, a decrease of 82 basis points year-over-year.

Net sales decreased 5.2 percent year-over-year, to $3.8 billion, with comparable sales down 5.5 percent. The sales results missed Wall Street expectations of $3.99 billion.

Digital sales were down 16.5 percent, impacted by the elimination of online-only promotions in favor of omnichannel pricing. Store comparable sales were down about 1 percent.

Still, while citing strong inventory and expense management, the corporate raised its forecast for diluted earnings per share for the yr to $2.30 to $2.70, excluding any non-recurring charges. This compares to the prior guidance range of $2.10 to $2.70.

The forecast on sales for the yr, nonetheless, was modified to a decrease of two.8 to 4 percent, and includes the impact of the 53rd week, which is value roughly 1 percent year-over-year. This compares to the prior guidance of a decrease of two to 4 percent.

Kohl’s stock closed down 8.6 percent percent, or $2.13, to $22.73.

“Kohl’s third-quarter earnings reflect strong gross margin and expense management in addition to additional progress against our strategic priorities,” Tom Kingsbury, Kohl’s chief executive officer, said in an announcement. “I’m pleased with our store performance driven by strong growth in Sephora and the novelty in our home and gifting initiatives. This reinforces our actions are working and resonating with our customers. As well as, we drove a 13 percent reduction in inventory as we benefited from our recent disciplines.

“Our strategies to reposition Kohl’s for improved sales and earnings performance remain within the early stages. The work we’ve got done in 2023 will proceed to construct momentum and set us up to achieve success in 2024. I proceed to be impressed with all the Kohl’s team for his or her exertions and agility in executing against our strategic priorities in 2023,” Kingsbury continued.

On the morning conference call with investors, Kingsbury said during 2023 there have been 4 strategic priorities: enhancing the shopper experience; accelerating and simplifying value strategies; managing inventory and expenses with discipline, and further strengthening the balance sheet. He predicted the corporate is “arrange to achieve success in 2024,” while adding, “it should take a while for the complete impact of our efforts to be realized.”

Kingsbury cited “meaningful investments” in stores including expanding pet products, gifts and impulse items in beauty, wellness, electronics, toys and snacks; simplifying in-store signs and graphics; consolidating checkout areas, and “stabilizing” apparel and footwear businesses. On Sephora, he said there’s increased confidence that it should turn right into a $2 billion business at Kohl’s by 2025. Sephora has a presence in greater than 900 Kohl’s stores.

In other updates on its financial outlook, Kohl’s indicated that it expects operating margin at roughly 4 percent, which is consistent with the prior guidance.

Capital expenditures are seen toward the lower end of $600 million to $650 million, including expansion of its Sephora partnership and store refresh activity.

In a single major change, Dave Alves, president and chief operating officer, left the corporate on Friday after lower than a yr on the job. The corporate said Alves left to pursue other opportunities and that it might not backfill the position.

“Stores and provide chain will now report back to me, with other executive leaders assuming oversight of other functions [including] real estate, purchasing and risk management,” Kingsbury said on the decision. “We’re confident we’ve got the appropriate leadership team going forward and the appropriate structure in place to best execute against our strategy, and I believe it should give us more speed when it comes to executing against our strategy.…I just feel that now that I’ve been on the job for a yr, I understand what we’d like as an organization.”

For the vacation season, Kingsbury said, “We at all times comprehend it’s going to be promotional. Promotions are core to what Kohl’s has done, and although we’ve done some great editing all year long, you will see us really lean in promotions.”