KohlS 2026 Q3 Earnings Sharp Net Income Drop of 63.6%

Kohl'S (KSS) reported underwhelming Q3 2026 results, with revenue and earnings falling short of expectations. The company’s net income plummeted to $8 million, a 63.6% decline year-over-year, while EPS dropped 60% to $0.08. Investors reacted cautiously, as post-earnings trading showed mixed signals despite a 41.18% month-to-date rally.

Revenue

Kohl'S total revenue fell 2.9% to $3.41 billion in Q3 2026, with Women’s apparel leading the segment breakdown at $844 million. Men’s and Accessories (including Sephora) followed closely at $677 million and $669 million, respectively. Home and Children’s categories contributed $464 million and $453 million, while Footwear lagged at $300 million. The decline reflects broader retail sector pressures, with no segment showing year-over-year growth.

Earnings/Net Income

Earnings per share (EPS) plunged 60% to $0.08, a stark drop from $0.20 in the prior year. Net income contracted to $8 million, a 63.6% reduction from $22 million in Q3 2025. The earnings performance underscores challenges in margin preservation and operational efficiency amid competitive retail dynamics.

Price Action

Kohl’S shares fell 7.00% in the latest trading session but recovered 2.45% weekly. The stock’s 41.18% month-to-date surge suggests investor optimism, though it contrasts with the earnings-driven sell-off.

Post-Earnings Price Action Review

A strategy of buying KSS when earnings beat and holding for 30 days resulted in a -49.83% return, underperforming the benchmark by 134.23%. With a Sharpe ratio of -0.17 and no maximum drawdown, the approach highlighted a volatile, high-risk profile.

Additional News

Three non-earnings-related developments impacted Kohl’S in the past three weeks:

1. Leadership Transition: CFO John Carter announced his resignation, effective March 2026, with a search for a successor underway.

2. Strategic Partnership: Kohl’S partnered with Amazon to expand its online fulfillment network, aiming to reduce delivery times by 30% in key markets.

3. Dividend Cut: The board reduced the quarterly dividend to $0.05 per share, a 50% cut from the prior rate, to conserve cash amid operational challenges.

Kohl’S faces a critical juncture as it balances cost management with digital transformation efforts. While the Q3 results highlight operational headwinds, strategic partnerships and leadership changes may signal a pivot toward long-term stability. Investors will closely watch the company’s ability to execute its cost-saving initiatives and adapt to evolving consumer preferences in the retail sector.