Kohl’s (KSS) Q2 2025 earnings

Kohl’s shares climbed 24% on Wednesday after the retailer topped Wall Street’s fiscal second-quarter earnings and revenue expectations, even as its sales declined and it looks for a new CEO.

The Wisconsin-based department store narrowed its full-year sales guidance to reflect the higher part of its previous range. It said it now expects net sales to decline by between 5% and 6%. It had previously anticipated sales would fall 5% to 7%.

It also revised its full-year earnings per share guidance. Kohl’s said it expects earnings to be in the range of 50 cents to 80 cents per share adjusted. It was unclear how that compared with a previous outlook of 10 cents to 60 cents per share, which was not adjusted.

On Kohl’s earnings call, interim CEO Michael Bender attributed the department store’s slower sales to the economy. He said lower- and middle-income customers are trading down to less-expensive brands. 

Yet he also said Kohl’s is working to fix its mistakes. For example, he said, it is reintroducing the petite section, which it had phased out. It has added jewelry back to stores — a category it took away to make room for Sephora shops — and focused on carrying exclusive brands, especially ones that have lower price points. And the retailer is overhauling its discount strategy, so customers can use coupons for more of its brands.

Yet Bender stopped short of saying when Kohl’s will report sales growth again. He said all of its initiatives seek to win back customers who have stopped visiting Kohl’s or bought less there recently.

“We know that our route to long-term success for this business is to get back to growth,” he said. “And everything that we’ve talked about and everything you’ve heard from us certainly is directed at that intention.”

Shares closed on Wednesday at $16.17, up 24%. As of Wednesday’s close, shares are up about 14% so far this year, outpacing the approximately 10% gains of the S&P 500 during the same period.

Here’s how the retailer did for the three-month period that ended Aug. 2 compared with what Wall Street was expecting, based on a survey of analysts by LSEG:

• Earnings per share: 56 cents adjusted vs. 29 cents expected
• Revenue: $3.35 billion vs. $3.32 billion expected

Kohl’s fiscal second-quarter net income was $153 million, or $1.35 per share, compared with $66 million, or 59 cents per share, in the year-ago period. Adjusting for one-time items, including the costs of store closures and gains from a legal settlement, earnings per share were 56 cents.

Net sales dropped from $3.53 billion in the year-ago quarter.

Kohl’s shares and sales have both been slumping — and the company’s leadership turmoil has tripped up its turnaround. Annual revenue has declined three years in a row. Its market value, which was just under $7 billion at the end of 2021, has fallen to roughly $1.5 billion. And the retailer has had three chief executives in as many years.

The company’s leadership changes began in late 2022 when Kohl’s CEO Michelle Gass left to…