(Bloomberg) -- Kohl's Corp. cited financial stress on its middle-income customers as it cut its profit and sales outlook for the second straight quarter. But soaring inflation is also helping the department-store chain entice wealthier shoppers hunting for bargains.
“In our higher-income customers, we're actually seeing more customers and they're spending more,” Chief Executive Officer Michelle Gass told analysts Thursday, attributing the trend to the “pressure” afflicting all US consumers.
Gass's comments echoed remarks earlier this week by Walmart CEO Doug McMillon, who said families making more than $100,000 drove a lot of sales growth last quarter as they sought refuge from the highest US inflation in four decades. Unfortunately for Kohl's, the boost from well-heeled consumers can't make up for the pullback by its core shoppers.
“We are seeing customers make fewer shopping trips, spend less per transaction, and shift toward our value-oriented private brands,” the Menomonee Falls, Wisconsin-based company said.
That's a similar pattern reported by other retailers with broad customer bases, Jefferies analyst Stephanie Wissink said in a report.
“Low and high appear to be holding up better than the middle,” Wissink said.
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