Kohls’ Stock Plummet Signaled in LinkUp Data

Wall Street will always miss what it can’t see. On Thursday, Kohl’s rattled the market with an unexpected quarterly loss of $27 million, falling well shy of analysts’ projections of a slim profit. By high noon, the retailer’s stock had plunged nearly 25%.

Market curves will forever be punctuated by surprise earnings results, but losses don’t come out of the clear blue sky; patterns emerge in the black box between quarterly reports. To know what’s actually happening behind any company’s curtain, investors need alternative sources of data that the C-Suite can’t massage or withhold.

The Kohl’s example is a great use case for LinkUp’s alternative data solution: our interactive dataset of millions of real time job openings pulled directly from employer websites. Because today’s open job is tomorrow’s hire, aggregated job openings offer a uniquely forward-looking picture of company health over time. Just a few minutes of investigating the chain’s hiring trends on Compass gave us a clearer sense of when trouble started for Kohls, and how investors tracking the company could have gotten ahead of Thursday’s earnings blow.

We started with our Monthly Job Listings tool, which tracks new, removed, and active jobs at thousands of public and private enterprises in our database. On first approach, we do notice a significant spike in removed jobs back in December, a strong indicator that a company is pulling back on hiring. Two questions emerge:

1. Retail is a seasonal gig. Is the December hiring die-off just a cyclical trend?

2. What types of jobs did Kohls pull back on?

Cue the Occupational Breakdown tool, where we filter the time frame to the last five years to test the seasonality question. What you’ll see in the graph below is significant.

1. Seasonality. There is a consistent pattern of hiring slash & burn each December at Kohl’s, mostly in sales and transport, after the retail cow has been fattened for Christmas shopping.

2. Rebound. In the last four years, that December cliff has been followed by a snappy hiring rebound starting in late January and peaking at an average of 400% growth by the last month of Q1, in anticipation of summer sales.

3. This year is different. By 5/22/24, Kohl’s registered 1,292 active job openings in the sales department, as opposed to 2,500 by the same time last year, and 3,300 in late May of 2022. That’s a reduction in seasonally-adjusted sales hiring of over 50%.

4. Slow plateau. The data shows an aberrant hiring slump that would have been broadly visible to a LinkUp Compass user by March of this year, two months ahead of Kohl’s earnings call on Thursday. You can see the flatline more clearly in the Compass graph below, filtered to include just the last year.

The signal lodged in this data is a leading indicator of problems Kohl’s CEO, Tom Kingsbury, would cop to in the Q1 earnings call. According to CNBC, he told investors “sales trends started the quarter strong in January and February, but weakened in the last five weeks of the period as customers held back on buying seasonal merchandise such as clothing for spring because of poor weather.”

Well the Compass graphs we’ve laid out here make the point months ahead of time: Kohl’s wasn’t moving merchandise or attracting the seasonal customers they rely on for revenue.

Keep ahead of the company curve and dig up buried signal with LinkUp Compass: it’s the job market, now in living color. And stay tuned for more of our Notes from The Evidence Lab, where we showcase the engaging interface and unmatched granularity of our job market dataset.

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