Kohl’s Corporation’s (KSS) shares jumped about 8% on Tuesday morning despite the retailer’s tepid sales forecast for its fiscal 2026. The move comes as Kohl’s reported mixed earnings results for its fiscal 2025 fourth quarter but excited investors with its massive profit growth.
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Kohl’s Misses Wall Street’s Revenue Target
During the three-month period ending January 31, the Wisconsin-based retailer grew its adjusted earnings per share by 13% to $1.07, exceeding the Wall Street consensus of $0.86 per share. However, quarterly net sales and total revenue fell by 3.9% and 4.3% to roughly $5 billion and $5.17 billion, respectively. The latter missed the consensus of $5.23 billion.
On an annual basis, Kohl’s also expanded its adjusted EPS by about 8% to $1.62, with total revenue declining by 4.3% to $15.51 billion. Comparable sales for the quarter and the full year also fell by 2.8% and 3.1%, respectively.
Kohl’s Expands Profit despite Sales Slump
However, net earnings stood out, with quarterly profits jumping by 160% year-over-year to $125 million and full-year profits rising roughly 150% to $272 million. This is despite the gross margin for the year declining by 34 basis points to 37.5% of net sales.
“In 2025, we made meaningful progress, despite our Q4 topline coming in softer than our expectations,” said Michael Bender, Kohl’s chief executive. “We were able to manage the business with discipline, deliver improved earnings, and generate meaningful cash flow, all of which helped us strengthen our balance sheet.”
Kohl’s Sees Tepid Sales in 2026
Looking ahead, Kohl’s sees its net sales for fiscal 2026 dropping by 2% year-over-year or coming in flat. It also expects its adjusted EPS to be in a range of $1.0 to $1.60.
Is Kohl’s a Good Stock to Buy Now?
On Wall Street, Kohl’s shares remain a Hold based on analysts’ consensus rating. This is based on four Hold and one Sell recommendation by five analysts over the past three months.
However, the average KSS price target of $19.20 implies about 21% upside. Nonetheless, it is important to note that analysts’ consensus rating may change following the latest earnings report.
