Key Takeaways
- Shares of Kohl’s rallied more than 15% following first-quarter results that marked the retailer’s strongest comparable sales showing since 2022
- The company posted a 1.1% decline in comparable sales, showing meaningful improvement from the previous quarter’s 2.8% drop
- Adjusted losses totaled 13 cents per share, outperforming analyst projections of a 19-cent loss
- First-quarter revenue reached $3 billion, topping the Street’s consensus forecast of $2.99 billion
- Management maintained its full-year forecast, projecting net sales ranging from down 2% to unchanged
Shares of the department store chain jumped more than 15% during Thursday’s trading session after delivering quarterly results that signaled its business is stabilizing.
Prior to the earnings announcement, the stock had tumbled over 35% year-to-date, leaving investors hungry for positive developments.
For the fiscal first quarter ending May 2, Kohl’s recorded a net loss of $14 million, translating to 13 cents per share on an adjusted basis. This result came in better than the Street’s consensus estimate calling for a 19-cent per share loss.
The retailer generated $3 billion in revenue during the period, representing a decline from last year’s $3.05 billion but still exceeding Wall Street’s target of $2.99 billion.
Comparable sales decreased 1.1% during the three-month period. While still in negative territory, this represents substantial progress compared to the 2.8% contraction recorded in the preceding quarter — marking the company’s strongest comparable sales result in more than four years.
Total net sales fell 1.7% compared to the year-ago period.
Improving Momentum in Core Metrics
Chief Executive Officer Michael Bender characterized the quarter as a promising beginning to fiscal 2026. “Our strategic initiatives are delivering sequential improvements across the business, culminating in our strongest comparable sales performance in over four years,” Bender stated.
The CEO also highlighted disciplined cost management, leaner inventory levels, and a strengthened balance sheet as additional bright spots during the period.
The company has faced persistent headwinds in recent quarters, grappling with declining sales and challenging consumer spending patterns that have weighed on performance.
Given this challenging backdrop, the first-quarter outperformance was particularly well-received by investors who had been seeking evidence that management’s turnaround efforts were beginning to take hold.
Annual Outlook Remains Unchanged
Kohl’s opted to maintain its existing full-year guidance. Management continues to project net sales and comparable sales in a range of down 2% to flat for the full fiscal 2026 year.
The company also reiterated its adjusted earnings per share outlook of $1.00 to $1.60. The $1.30 midpoint of this range falls slightly below the analyst consensus estimate of $1.36.
The decision to maintain guidance is significant considering the unpredictable retail landscape. Keeping the full-year targets intact following a better-than-anticipated first quarter indicates management has reasonable confidence in its current business trajectory.
While Kohl’s stopped short of raising its outlook, which might have dampened some investor enthusiasm, simply affirming the existing forecast proved sufficient to drive shares substantially higher.
The stock opened up approximately 10% in premarket trading before extending gains beyond 15% after the opening bell, representing one of the most significant single-session advances for the stock in recent quarters.
Prior to the earnings release, KSS shares had closed Wednesday’s session down more than 35% since the beginning of the year.
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