Insider Buying: The CEO of Kohl’s Just Bought $2 Million Worth of Stock

Top-level insiders such as CEOs and Chairmen tend to have a good understanding of their companies’ prospects. If they’re buying company stock, it’s generally a sign that they’re confident about the future.

In this report, we are going to highlight a large CEO purchase at Kohl’s Corporation (KSS:US). Kohl’s is an American department store company. Currently, it has over 1,100 stores across the US, making it the largest department store chain in the country. It is listed on the New York Stock Exchange and has a market cap of approximately $2.50 billion at present.

Insider Buying at Kohl’s

2iQ’s data shows that on March 29, Kohl’s CEO Thomas Kingsbury purchased 92,500 shares at a price of $21.82 per share. This trade cost the insider approximately $2 million and increased his holding to 228,993 shares.

High-conviction Trade

This trade is notable for several reasons.

Firstly, it’s large in size. Our data shows that it’s the largest purchase from an insider at Kohl’s in over a decade.

Secondly, it has increased the size of Mr. Kingsbury’s holding by nearly 70%. The fact that the insider has boosted his stake by such a large percentage suggests that he sees a lot of value in the stock currently.

Third, Mr. Kingsbury has over 40 years of retail industry experience and has held a variety of company and board leadership roles within the industry. Previously, he served as President and CEO at Burlington Stores, Inc. from 2008 to 2019. Given his background, he is likely to have a good read on his company’s prospects.

Turnaround Plan

Kohl’s recent Q4 results weren’t amazing. For the quarter, net sales were down 7.2% year on year to $5.8 billion with comparable sales down 6.6%. The company attributed the lack of growth to weak demand for clothing and accessories as consumers tighten their belts amid high inflation.

The company has plans to improve performance, however. On the Q4 earnings call, Mr. Kingsbury said that its stores – which have been described as “shabby” – will be modernized to make them more attractive to shoppers, and that e-commerce will get a boost from the expansion of the company’s online third-party marketplace. He added that improvements to inventory management and merchandising are already under way, with a new emphasis on private label, home goods, and gifting.

“Our efforts to drive the business are already underway. We are refining our strategy and re-establishing merchandise disciplines with a customer-centric focus across the organization. I am confident that our efforts will drive improved, and more consistent, sales and earnings performance over the long-term,” said Mr. Kingsbury in the Q4 results.

In light of this turnaround plan, we see the insider buying here as a bullish signal.