KohlS 2026 Q1 Earnings Narrowed Losses by 44.4%

Kohl'S (KSS) reported its fiscal 2026 Q1 earnings on June 6, 2025. Kohl’s earnings for the first quarter revealed narrowed losses, surpassing anticipated results. The company reported a net loss of $15 million, or $0.13 per share, against analyst expectations of a deeper loss. Guidance for the full year remained in line with previous forecasts, projecting a decline in net sales between 5% and 7% and diluted EPS ranging from $0.10 to $0.60. The retail chain continues to take strategic actions aimed at sustaining its business momentum.

Revenue

Kohl's experienced a 4.1% decline in total revenue for the first quarter of fiscal 2026, amounting to $3.05 billion compared to $3.18 billion during the same period in 2025. Women's apparel generated $851 million, with accessories, including Sephora, contributing $646 million. Men's clothing accounted for $584 million, while revenue from home goods reached $370 million. Children's products stood at $312 million, and footwear yielded $286 million. Net sales totaled $3.05 billion, reflecting the overall performance across these segments.

Earnings/Net Income

Kohl's narrowed its losses to $0.13 per share in fiscal 2026 Q1, improving from a loss of $0.24 per share in fiscal 2025 Q1, marking a 45.8% enhancement. The net loss was reduced to $15 million from $27 million year over year, representing a 44.4% improvement. The EPS performance indicates a positive trend in financial recovery.

Post Earnings Price Action Review

The strategy of purchasing Kohl's shares following a revenue miss and holding them for 30 days has proven ineffective, as demonstrated by its -62.50% return. The Sharpe Ratio of -0.29 and the maximum drawdown of -88.35% highlight the strategy's significant underperformance compared to the benchmark return of 85.73%. High volatility, peaking at 61.47%, underscores the risks associated with this approach. Despite these challenges, Kohl's stock has experienced a positive uptick, climbing 7.63% over the past week and surging 34.20% month-to-date, reflecting recent investor optimism. The contrasting figures suggest that while the strategy failed, other market forces have contributed to a favorable stock trajectory in the short term.

CEO Commentary

Michael Bender, Interim Chief Executive Officer, remarked on Kohl's first-quarter performance, highlighting that it surpassed expectations and is showing early signs of positive impact from the actions taken. He noted the company's strong foundation with over 1,100 stores and a loyal customer base, emphasizing the team's motivation to provide great products and value. Bender expressed gratitude towards the associates for their dedication and conveyed enthusiasm for leading Kohl's into the next chapter, aiming to build on the momentum generated thus far.

Guidance

For the full year 2025, Kohl's expects net sales to decrease by 5% to 7% and comparable sales to decline by 4% to 6%. The operating margin is projected to range between 2.2% and 2.6%, while diluted EPS is guided to be between $0.10 and $0.60. The company anticipates capital expenditures of $400 million to $425 million and has reaffirmed its financial outlook for the year.

Additional News

In recent weeks, Kohl’s has experienced significant leadership changes. On May 1, 2025, the company terminated CEO Ashley Buchanan for cause following an investigation into business dealings with a vendor linked to Buchanan's personal relationship. This decision prompted the appointment of Michael Bender as Interim CEO. Additionally, Kohl’s Board of Directors declared a quarterly cash dividend of $0.125 per share on May 14, 2025, payable to shareholders on June 25, 2025. Despite ongoing challenges, Kohl’s remains committed to strategic initiatives aimed at driving operational improvements and maintaining shareholder value amidst evolving market conditions.