Kohl’s (KSS) Stock: Soars 22% as Q2 Earnings Stun Wall Street

TLDR

Table of Contents

Kohl’s reported adjusted earnings of 56 cents per share, nearly doubling Wall Street estimates of 30 cents
Revenue fell 5% to $3.55 billion but still topped analyst expectations of $3.3 billion
Company raised full-year profit forecast to 50-80 cents per share from previous 10-60 cents range
Stock jumped 22% in premarket trading despite vendor payment concerns from Tuesday
Cost-cutting measures included inventory reduction and 4.1% decrease in administrative expenses

Kohl’s delivered a massive earnings surprise that sent shares soaring 22% in premarket trading Wednesday. The retailer’s adjusted earnings of 56 cents per share crushed Wall Street estimates of 30 cents.

Kohl's Corporation (KSS) — Kohl’s Corporation (KSS)

This performance came just one day after Bloomberg reported the company was asking vendors for more time to settle invoices. The stock had dropped 6.5% on Tuesday following those concerns.

Revenue for the quarter ended August 2 fell 5% year-over-year to $3.55 billion. Despite the decline, sales still beat analyst expectations of $3.3 billion.

Kohl's, $KSS, Q2-25. Results:
📊 Adj. EPS: $0.56 🟢
💰 Revenue: $3.55B 🟢
📈 Net Income: $153M
🔎 Legal settlement boosted GAAP earnings, while adjusted results reflect ongoing sales softness and margin improvements. pic.twitter.com/UhSYGTuak0
— EarningsTime (@Earnings_Time) August 27, 2025

The company also raised its full-year guidance. Kohl’s now expects net sales to decrease between 5% and 6% this year, an improvement from prior guidance of 5% to 7% decline.

Adjusted earnings per share will range from 50 cents to 80 cents. This represents a jump from the previous range of 10 cents to 60 cents per share.

Interim CEO Michael Bender credited disciplined business management for the strong results. The company expanded gross margins while reducing inventory and lowering expenses.

Strategic Cost Reduction Drives Results

Selling, general and administrative expenses fell 4.1% from the previous year. This followed a 5.2% drop in the first quarter, showing consistent expense management.

Kohl’s closed an e-fulfillment center in Ohio earlier this year due to slowing digital demand. The company is also downsizing its in-store jewelry business.

The retailer has been pruning inventory of its own brands to include fresher products. These moves helped expand margins despite ongoing sales challenges.

Comparable sales fell 4.2% in the quarter. However, this decline was smaller than estimates of a 5% drop.

The Wisconsin-based company tightened its annual sales forecast while raising operating margin targets for 2025. These adjustments reflect management’s confidence in the turnaround strategy.

Leadership Changes and Market Challenges

Kohl’s has faced considerable leadership instability with five CEOs in the past decade. Current CEO Bender stepped into the role in May after his predecessor was terminated for cause.

Same-store sales have declined for 14 consecutive quarters through the period ending in August. The company operates in a challenging retail environment with intense competition from online retailers and discount stores.

The stock remains down 7% for the year despite Wednesday’s surge. Over the past five years, shares have lost about 32% while the S&P 500 Consumer Discretionary index gained 66%.

Roughly 33% of Kohl’s 12.2 million outstanding shares are sold short. Part of Wednesday’s rally may stem from short sellers buying back shares to limit losses.

The retailer briefly attracted meme-stock trader attention earlier this summer. These retail investors often target heavily shorted stocks attempting to trigger price squeezes.

A company spokeswoman addressed the vendor payment concerns, stating Kohl’s notified partners in March about updated payment terms. These changes align with standard retail industry practices, the company said.

In March, Kohl’s cut its quarterly dividend to 12.5 cents per share from 50 cents. The reduction aimed to conserve cash and pay down debt as part of the turnaround effort.

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