Kohl’s Faces Sell Rating Amidst Sales Challenges and Tariff Pressures

Analyst Lorraine Hutchinson from Bank of America Securities reiterated a Sell rating on Kohl’s (KSS – Research Report) and keeping the price target at $7.00.

Lorraine Hutchinson’s rating is based on several factors impacting Kohl’s current and future performance. The company is facing ongoing challenges in rebuilding its sales amidst a volatile macroeconomic environment, which is reflected in the decision to lower the fiscal year 2025 earnings per share estimate due to tariff pressures. Additionally, Kohl’s is experiencing a contraction in its EBIT margin and a decline in comparable sales, indicating difficulties in achieving a swift turnaround.
Despite some positive developments, such as improved SG&A and credit revenue, and strategic initiatives under a new interim CEO, the necessary changes to assortment and customer trust are expected to take time. The company is also testing new store layouts to enhance sales, but the results are mixed, with some segments like the Women’s business still struggling. Furthermore, while Kohl’s has implemented tariff mitigation strategies, passing on price increases to customers remains challenging, which could affect profitability. These factors contribute to the Sell rating as the company navigates these headwinds.

According to TipRanks, Hutchinson is a 5-star analyst with an average return of 7.7% and a 53.94% success rate. Hutchinson covers the Consumer Cyclical sector, focusing on stocks such as Kohl’s, Bath & Body Works, and Nike.

In another report released yesterday, Barclays also maintained a Sell rating on the stock with a $5.00 price target.