KohlS 2026 Q2 Earnings Strong Performance as Net Income Surges 131.8%

Kohl'S (KSS) reported its fiscal 2026 Q2 earnings on Aug 27th, 2025. The company surpassed expectations with a significant rise in profitability despite a revenue decline, indicating operational improvements. Kohl's raised its full-year 2025 financial outlook, reflecting confidence in its strategic execution.

Kohl'S reported total revenue of $3.35 billion for Q2 2026, reflecting a 5.0% decrease from $3.52 billion in Q2 2025. The decline was attributed to broader economic pressures and shifting consumer spending patterns.

Despite the revenue dip, Kohl’S delivered a robust performance in earnings. Earnings per share (EPS) surged 132.2% to $1.37 in Q2 2026 compared to $0.59 in Q2 2025. Net income also saw a remarkable increase, growing 131.8% to $153 million from $66 million in the prior year. This strong earnings performance was driven by gross margin expansion and disciplined cost management.

The stock price of Kohl’S edged down 1.73% during the latest trading day, surged 21.21% during the most recent full trading week, and surged 26.03% month-to-date.

The post-earnings trading strategy of buying shares after the revenue raise quarter-over-quarter on the financial report release date and holding for 30 days resulted in a -52.74% loss. The underperformance was stark, lagging behind the benchmark by 111.59%. This strategy exhibited a maximum drawdown of 0.00% and a Sharpe ratio of -0.26, indicating high volatility (87.90%) and risk.

Michael J. Bender, Interim CEO, highlighted progress in digital and proprietary brand sales, emphasizing strategic priorities such as curating assortments, reestablishing value leadership, and enhancing the omnichannel experience. He acknowledged the need for continued improvement and expressed cautious optimism about the company’s path forward.

Kohl’s updated its 2025 guidance, projecting a net sales decline of 5% to 6%, a comparable sales decrease of 4% to 5%, and adjusted diluted EPS of $0.50 to $0.80. The company anticipates gross margin expansion of approximately 30 basis points, SG&A expenses down 4% to 4.5%, and capital expenditures of $400 million, primarily directed toward Sephora and e-commerce expansions.

In the three weeks leading up to the Q2 earnings release, Kohl’s announced several strategic and financial updates. The company raised its full-year 2025 financial guidance, signaling confidence in its performance. Additionally, it declared a quarterly dividend of $0.125 per share, payable on September 24, 2025, to shareholders of record as of September 10, 2025. The firm also repaid $353 million of the current portion of long-term debt by settling the 4.25% notes due in July 2025 at maturity, while long-term debt increased by $347 million through the issuance of $360 million of 10.000% senior secured notes due 2030.