The outgoing Kohl’s CEO admitted failings, which students can analyze as an example of communicating bad news and accountability. The third-quarter earnings deck also serves as a class example.

One reason for Tom Kingsbury’s blunt admission is the obvious decline in sales and stock price. In the past two years, the stock declined 52%, and this quarter, sales declined 9.3%. In addition, Kingsbury is 72 years old and retiring; he may be concerned about his legacy, but he is no longer concerned about his next career move. Also, as a Citi analyst points out, he can’t blame macroeconomic conditions, as Target did recently, because Kohl’s decline is far beyond what we would expect from the results of inflation and more people shopping online.

Coming in as an activist investor, Kingsbury implemented ideas that didn’t work. Reducing petite clothing, jewelry sales, and private brand labels hurt sales. During the earnings webcast, Kingsbury said these decisions were “shortsighted.” He also said, “We thought, ‘We can do more with a lot less,’ and that didn’t work out for us.” On a positive note, he said, “We continue to believe our market brand strategy and investments into the key growth categories are the right long-term strategic moves,” although the WSJ writer disagrees: “So far, the numbers have told a different story.”

Students can read the quarterly presentation deck, with Kingsbury’s opening quotes. I admire his admission and taking responsibility, but we don’t see a clear strategy for the future, which sounds bleak. He says only “we must execute at a higher level and ensure we are putting the customer first”—nothing new here, and his plans to lower expectations aren’t inspiring. Kingsbury also uses “we” but will leave the company in May. Oddly, the company announced a new CEO the day before the earnings presentation. That’s good news! But I guess the deck couldn’t be updated in time? Students could suggest a stronger approach for this first content slide.

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