Baird downgraded Kohl's (NYSE:KSS) to "neutral" from "outperform" after the company's weak third quarter and noted the ongoing pressure in its core apparel and footwear business, among notable challenges.

Kohl's reported disappointing Q3 earnings as sales in key segments lagged expectations, prompting a downward revision of its full-year outlook.

Financial struggles at Kohl's Corporation lead to a 37% stock drop in 2021. Read why KSS stock is downgraded to Hold.

Analysts expect Kohl’s to report quarterly earnings at 27 cents per share. That's down from 54 cents per share a year ago. The Menomonee Falls, Wisconsin-based company projects to report quarterly revenue of $3.71 billion, compared to $3.84 billion a year earlier, according to data from Benzinga Pro.

The Zacks Consensus Estimate pegs anticipated revenue at $3.8 billion, a 5.3% decline from last year's third-quarter revenue, with analysts saying Kohl’s (NYSE: KSS) continues to “face significant challenges due to a tough macroeconomic environment.”

Kohl's on Tuesday forecast a bigger drop in annual sales than previously expected, a sign the department-store chain is struggling to draw in shoppers as it navigates a CEO change ahead of a deal-heavy holiday shopping season.

Kohl’s saw sales decline in the latest quarter while its revised outlook for the year suggested a challenging upcoming holiday period, creating a challenging setup for its next chief executive.