Corporation (NYSE:KSS) shares experienced a notable decline on Thursday, reaching their lowest point on record. The drop, which reached up to 26%, followed an unexpected quarterly loss and a reduced forecast for annual sales and profits.

The loss was attributed to a decrease in consumer demand for apparel and footwear offered by Kohl’s. According to CEO Tom Kingsbury, this shift in consumer behavior is due to American shoppers prioritizing essential purchases over discretionary items such as apparel, electronics, and home goods. He explained that while discretionary spending remains stable among high-income customers, middle-income customers are experiencing significant financial pressure due to factors like inflation and high interest rates.

In contrast to Kohl’s disappointing performance, other retailers, including Abercrombie & Fitch Co. (NYSE:ANF), have reported strong first-quarter sales due to their more fashionable merchandise offerings.

Zak Stambor, a senior analyst at eMarketer, commented that Kohl’s has relied heavily on partnerships with brands like Sephora, Amazon (NASDAQ:AMZN), and now Babies R Us to attract customers, rather than establishing a strong and distinct brand identity. He emphasized that consumers are willing to spend on fashionable and well-made items, citing examples like Abercrombie’s dresses and Sweetgreen’s (NYSE:SG) healthy salads.

Kohl’s also noted that a reduction in clearance sales compared to the previous year resulted in a significant decline in comparable sales, which fell by 4.4% during the first quarter.

Kohl’s revised its net sales forecast for fiscal 2024 to a decline between 2% and 4%, adjusting from the previous expectation of a 1% drop to a 1% increase. The company also updated its annual earnings per share forecast to a range of $1.25 to $1.85, from the earlier forecast of $2.10 to $2.70.

For the first quarter, Kohl’s reported a loss of 24 cents per share, while analysts had anticipated a profit of 4 cents per share, according to LSEG data.

As a result, Kohl’s shares were trading at $20.38, marking a historic low. Meanwhile, peers Macy’s Inc. (NYSE:M) and Nordstrom Inc. (NYSE:JWN), which is set to report later today, saw their shares decline by about 3% each.