MW Why Kohl's investors are happy its new CEO was fired after just 106 days at the helm

By Tomi Kilgore

The discount department store's stock recently closed at 30-year low, and had been losing to those of its rivals by a wide margin

Investors in Kohl's Corp. shares are cheering Thursday, even after, or perhaps because, the discount department store chain said Chief Executive Ashley Buchanan was fired after less than four months on the job.

The termination, effective immediately, was for cause. The company $(KSS)$ named Michael Bender as interim CEO. Bender was named board chair in May 2024, after joining the company's board of directors in July 2019.

"An investigation conducted by outside counsel and overseen by the audit committee of the board determined Mr. Buchanan violated company policies by directing the company to engage in vendor transactions that involved undisclosed conflicts of interest, which the board determined to be cause," the company said in a statement.

The stock surged 7.5% in midday trading. It has now bounced 17.5% since it closed at a 30-year low of $6.13 on April 16.

One reason the stock may be rallying is how badly the stock had performed during Buchanan's 106-day tenure as CEO.

Buchanan's first day in the role was Jan. 15. He was previously CEO of arts-and-crafts retailer Michaels Companies, which was taken private in 2021 by Apollo Global Management Inc. $(APO)$ in a $3.3 billion deal.

While he was CEO, Kohl's shares had plunged 47.2% through Wednesday's close.

Among its competitors, TJX Companies Inc.'s stock $(TJX)$ had gained 7.9% over the same time, shares of Burlington Stores Inc. $(BURL)$ had dropped 20.6% and Ross Stores Inc. shares $(ROST)$ had lost 6.8%.

By broader measures, the SPDR S&P Retail ETF XRT had shed 11.5% since Jan. 15 through Wednesday, while the S&P 500 index SPX had eased 4.7%.

Keep in mind the selloff in Kohl's stock didn't just start this year, as it plunged a yearly record 51.1% in 2024, while the SPDR retail ETF rose 10.1%.

Another reason investors may be cheering is in the release about Buchanan's termination, the company also said it expected to report a first-quarter loss of 20 cents to 24 cents a share. That's less than half the average analyst estimate compiled by FactSet for a per-share loss of 54 cents.

The company also expects comparable sales - those at stores open at least a year - to decline 4% to 4.3% from a year ago, which was better than the current FactSet consensus for a drop of 6.4%.

The company hasn't reported growth in comparable sales since March 2022. Kohl's is projected to report fiscal first-quarter results on or around May 21.

In the most recent quarterly report released in March 2025, Buchanan said the company had made many changes to its product offering and price points in an attempt to attract new customers, while causing "friction" with its core customer.

-Tomi Kilgore

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May 01, 2025 12:43 ET (16:43 GMT)

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