TLDR
- Kohl’s stock jumped 28% on Tuesday after raising full-year earnings guidance to $1.25-$1.45 per share
- The company improved its sales outlook, now expecting a 3.5%-4% decline versus the prior 5%-6% forecast
- Michael Bender was named permanent CEO on Monday following successful turnaround efforts
- Third-quarter sales of $3.41 billion exceeded analyst expectations of $3.32 billion
- The retailer’s Sephora partnership and value-focused strategy are attracting new shoppers
Kohl’s delivered impressive news on Tuesday that sparked a massive rally in its stock price. The department store operator raised its annual financial forecasts for the second time in 2025.
Shares closed up 28% following the announcement. This represents one of the strongest single-day performances for the retailer in recent memory.
The company increased its adjusted earnings per share guidance dramatically. Kohl’s now expects to earn between $1.25 and $1.45 per share for fiscal 2025. The previous forecast ranged from just 50 cents to 80 cents.
Sales projections also improved. The retailer now anticipates annual sales will fall 3.5% to 4%. That’s better than the earlier prediction of a 5% to 6% decline.
These forecast upgrades came one day after the company made a key leadership move. Michael Bender was officially appointed permanent CEO on Monday.
Turnaround Strategy Gains Traction
Bender has implemented a clear strategy to revive the struggling retailer. His plan focuses on attracting price-conscious shoppers through expanded coupon programs and exclusive brands.
The approach targets lower- and middle-income consumers. These shoppers continue facing pressure from persistent inflation and higher prices linked to tariffs.
Kohl’s third-quarter results validated this strategy. The company reported sales of $3.41 billion for the period. That topped analyst estimates of $3.32 billion compiled by LSEG.
Beauty Partnerships Drive Traffic
The retailer has expanded its Sephora collaboration to draw younger customers. Kohl’s stores now feature popular beauty brands like Selena Gomez’s Rare Beauty.
Shoppers can also find Prada’s Miu Miu fragrance collection and L’Oreal’s Kerastase haircare line. These trendy offerings help Kohl’s appeal beyond its traditional customer base.
The company is leaning into the holiday shopping season with new collections and promotional campaigns. These efforts appear to be paying off based on the improved guidance.
Market Reaction Spreads
The positive momentum from Kohl’s extended to competitors. Macy’s shares rose approximately 5% in premarket trading following the announcement.
This marks the second time this year Kohl’s has raised its annual outlook. The repeated forecast increases suggest the turnaround is building real momentum.
Bender’s focus on proprietary brands gives Kohl’s another growth avenue. Private-label products typically deliver higher profit margins than national brands.
The 28% stock surge reflects investor confidence in the company’s direction. The combination of beat-and-raise results sent a strong signal to Wall Street.
Kohl’s exceeded sales expectations by roughly $90 million in the third quarter. This performance demonstrated that the company’s strategies are resonating with shoppers during a challenging retail environment.
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