Kohl’s Stock Slumps After Earnings. Its Turnaround Strategy May Actually Working.

Kohl’s sales and comparable sales fell in its fiscal second quarter, but the retailer raised its fiscal-year guidance. (Justin Sullivan/Getty Images)

Key Points

• Kohl’s posts adjusted earnings of $1.28 a share for the second quarter, beating Wall Street estimates.
• The retailer raises its fiscal-year outlook to reflect the impact of roughly $150 million in tariff refunds received in the second quarter.
• Kohl’s plans to restart share buybacks this year, targeting up to $100 million under an existing $3 billion authorization.

The chief executive of Kohl’s insists the retailer is powering through its turnaround even as sales continued to decline in its latest quarter.

Kohl’s posted adjusted earnings of $1.28 a share for the three months ended Aug. 1, easily topping Wall Street’s estimate of 58 cents. However, net sales fell 0.9% to $3.3 billion, in line with the consensus estimate among analysts tracked by FactSet. Comparable sales fell just as much, though this was less severe than the 1.1% drop in the previous quarter.

Net income slipped to $151 million from $153 million in the same period last year.

The sales slump continues a yearslong downward trend that sparked the company’s turnaround plan under CEO Michael Bender, who assumed the role in an interim capacity in May 2025 before permanently taking the reins later that year.

Bender said the latest results “reflect the ongoing progress against our initiatives,” including “another improvement” in comparable sales. “While we are encouraged with the momentum we have made thus far, we know there is critical work ahead of us,” Bender added.

Kohl’s raised its fiscal-year outlook to reflect the impact of roughly $150 million in tariff refunds received in the second quarter. Management now expects net and comparable sales to be flat to down 1.5% versus its previous forecast of flat to a 2% drop. Adjusted earnings are forecast to land between $1.80 to $2.40 a share, up from a prior range of $1 to $1.60. Analysts were looking for $1.45.

Shares tumbled 8.4% in premarket trading Wednesday. Futures tracking the benchmark S&P 500 index were flat.

Kohl’s has taken advantage of discounted note prices by repurchasing its unsecured debt on the open market. In the last six months, the retailer bought back $113 million of debt at a $15 million discount, building on $87 million in repurchases last year.

The retailer separately said it plans to restart share buybacks this year, targeting up to $100 million under an existing $3 billion authorization. Kohl’s initially paused its repurchase program in May 2020 to preserve cash during the onset of the pandemic.

Write to Mackenzie Tatananni at mackenzie.tatananni@barrons.com

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