Kohl's Q1 Earnings Beat Expectations with Strategic Outlook
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 2 days ago
0mins
Source: seekingalpha
- Earnings Highlights: Kohl's reported a Q1 GAAP EPS of -$0.13, beating expectations by $0.09, while revenue of $3.17 billion, down 1.9% year-over-year, exceeded market forecasts by $140 million, demonstrating resilience amid challenges.
- Gross Margin Improvement: The gross margin as a percentage of net sales was 39.9%, an increase of 4 basis points year-over-year, indicating effective cost control and pricing strategies that enhance profitability.
- Inventory Management Optimization: Inventory stood at $2.9 billion, an 8% decrease year-over-year, reflecting effective inventory management that helps reduce capital lock-up and improve operational efficiency.
- Future Outlook: Kohl's anticipates a 2% decline to flat net sales for 2026, with adjusted EPS expected in the range of $1.00 to $1.60, indicating a cautious approach in an uncertain market environment while planning to invest $350 million to $400 million in capital expenditures to support long-term growth.
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Analyst Views on KSS
Wall Street analysts forecast KSS stock price to rise
13 Analyst Rating
1 Buy
7 Hold
5 Sell
Moderate Sell
Current: 15.590
Low
7.00
Averages
19.58
High
25.00
Current: 15.590
Low
7.00
Averages
19.58
High
25.00
About KSS
Kohl's Corporation is an omnichannel retailer. The Company operates approximately 1,100 stores and a Website www.Kohls.com. The Company’s Kohl's stores and Website sell private and national brand apparel, footwear, accessories, beauty, and home products. The Company’s Kohl's stores generally carry a consistent merchandise assortment with some differences attributable to local preferences, store size, and Sephora at Kohl's shop-in-shops (Sephora shops). Its Website includes merchandise, which is available in the Company’s stores, as well as merchandise that is available only online. Its merchandise mix includes both national brands and private brands that are available only at Kohl's. Its private portfolio includes established brands such as Apt. 9, Croft & Barrow, Jumping Beans, SO, Sonoma Goods for Life, and Tek Gear, and nationally recognized brands such as LC Lauren Conrad, Nine West, and Simply Vera Vera Wang.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Kohl's Surprises with Q1 Earnings, Stock Soars 21%
- Sales Performance Recovery: Kohl's reported Q1 net sales of $3 billion, down 1.7% year-over-year, yet exceeding analyst expectations of $2.99 billion, indicating resilience in a challenging market.
- Narrowing Net Loss: The company's GAAP net loss was $14 million ($0.13 per share), an improvement from last year's $15 million loss, reflecting effective cost management strategies by the management team.
- Management Confidence Boost: CEO Michael Bender noted that key initiatives are driving progressive business improvements, resulting in the best comparable sales performance in over four years, showcasing the company's adaptability in a competitive landscape.
- Cautious Future Outlook: Kohl's reiterated its guidance for FY 2026, forecasting flat to 2% lower net and comparable sales, yet demonstrating strong expense management, which lays a foundation for potential long-term recovery despite ongoing challenges.
See More
Kohl's Surprises with Strong Q1 Earnings Report
- Sales Decline: Kohl's reported net sales of $3 billion in Q1, down 1.7% year-over-year; however, the sales performance still exceeded analyst expectations, indicating some market resilience.
- Narrowed Net Loss: The company's net loss under GAAP narrowed to $14 million ($0.13 per share), an improvement from last year's $15 million loss, suggesting effective cost control measures by management.
- Analyst Estimates Surpassed: Kohl's sales and per-share net loss figures surpassed analyst expectations, with sales forecasted at $2.99 billion and net loss per share at $0.21, demonstrating the company's ability to maintain profitability amid challenges.
- Future Guidance: Kohl's reiterated its guidance for FY 2026, forecasting flat to 2% lower net and comparable sales, while non-GAAP net income is expected to range from $1 to $1.60 per share, reflecting a cautiously optimistic outlook for the future.
See More
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See More
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- Stock Price Surge: Following the earnings report, Kohl's shares rose approximately 10% in premarket trading, reflecting positive market sentiment towards the company's turnaround strategy, especially after experiencing a meme-stock-like doubling in value last year.
- Strategic Transformation: Since taking over as CEO in November, Michael Bender has focused on introducing fresher items like fruits and vegetables to engage lower and middle-income customers while reviving categories like jewelry and accessories to enhance customer loyalty.
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- Financial Performance Beats Expectations: The company achieved net sales of $3 billion in Q1, exceeding Wall Street's $2.99 billion forecast, with a loss per share of 13 cents, better than the expected 19 cents, suggesting improved financial management.
- Full-Year Outlook Reaffirmed: Kohl's reaffirmed its full-year outlook, expecting net and comparable sales to decline by 2% to flat, with adjusted earnings per share projected between $1 and $1.60, reflecting confidence in future performance.
- Positive Market Reaction: Following the earnings report, Kohl's stock jumped over 8% in premarket trading, reflecting investor optimism regarding the company's improved sales performance and operational efficiency.
See More
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- Sales Performance Recovery: Kohl's reported Q1 net sales of $3 billion, down 1.7% year-over-year, yet exceeding analyst expectations of $2.99 billion, indicating resilience in a challenging market.
- Narrowing Net Loss: The company's GAAP net loss was $14 million ($0.13 per share), an improvement from last year's $15 million loss, reflecting effective cost management strategies by the management team.
- Management Confidence Boost: CEO Michael Bender noted that key initiatives are driving progressive business improvements, resulting in the best comparable sales performance in over four years, showcasing the company's adaptability in a competitive landscape.
- Cautious Future Outlook: Kohl's reiterated its guidance for FY 2026, forecasting flat to 2% lower net and comparable sales, yet demonstrating strong expense management, which lays a foundation for potential long-term recovery despite ongoing challenges.
See More
Kohl's Surprises with Strong Q1 Earnings Report
- Sales Decline: Kohl's reported net sales of $3 billion in Q1, down 1.7% year-over-year; however, the sales performance still exceeded analyst expectations, indicating some market resilience.
- Narrowed Net Loss: The company's net loss under GAAP narrowed to $14 million ($0.13 per share), an improvement from last year's $15 million loss, suggesting effective cost control measures by management.
- Analyst Estimates Surpassed: Kohl's sales and per-share net loss figures surpassed analyst expectations, with sales forecasted at $2.99 billion and net loss per share at $0.21, demonstrating the company's ability to maintain profitability amid challenges.
- Future Guidance: Kohl's reiterated its guidance for FY 2026, forecasting flat to 2% lower net and comparable sales, while non-GAAP net income is expected to range from $1 to $1.60 per share, reflecting a cautiously optimistic outlook for the future.
See More
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- Chipmaker Stock Surge: Arm Holdings' shares jumped over 15% after Mizuho raised its price target from $290 to $360, anticipating strong growth from internal CPU demand in 2027, which boosts market confidence in its future performance.
- Rail Merger Halted: Shares of Norfolk Southern and Union Pacific fell about 4% after the Surface Transportation Board halted its review of the proposed $71.5 billion merger, indicating regulatory concerns that could impact future market consolidation.
- Cloud Platform Performance: Snowflake's stock soared 37%, with expectations for a second-quarter adjusted operating margin of 12.5%, exceeding analysts' forecast of 11.9%, demonstrating its strong growth potential in the cloud computing market.
See More
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- Meta Launches AI Subscription Service: Meta Platforms announced it will start selling subscriptions for its AI chatbot, with Meta One Plus priced at $7.99 per month offering image and video generation, while Meta One Premium at $19.99 includes expanded functionalities, potentially boosting company revenues.
- IBM Increases Quantum Computing Investment: IBM plans to invest $10 billion in quantum computing over the next five years and has committed $5 billion to an AI-linked open-source software project, aimed at enhancing R&D and manufacturing capabilities.
- Kohl's Exceeds Earnings Expectations: Kohl's reported better-than-expected first-quarter results, with a 2% sales drop leading to a loss of $0.13 per share, yet disciplined cost management improved results by $0.09 over analyst expectations, resulting in an over 8% stock price increase, reflecting strong sales performance.
See More
Kohl's Maintains Annual Targets as Sales Meet Estimates
- Stable Sales Performance: Kohl's reported first-quarter net sales of $3 billion, aligning with market estimates, indicating that the company's efforts in cost-cutting and product category expansion are starting to pay off, despite expectations for annual net sales to remain flat or decline by up to 2%.
- Stock Price Surge: Following the earnings report, Kohl's shares rose approximately 10% in premarket trading, reflecting positive market sentiment towards the company's turnaround strategy, especially after experiencing a meme-stock-like doubling in value last year.
- Strategic Transformation: Since taking over as CEO in November, Michael Bender has focused on introducing fresher items like fruits and vegetables to engage lower and middle-income customers while reviving categories like jewelry and accessories to enhance customer loyalty.
- Partnership Expansion: Kohl's is expanding its partnership with Sephora to attract younger consumers and win back loyal shoppers, demonstrating the company's strategic commitment to enhancing shopping experiences and product diversity.
See More
Kohl's Achieves Best Comparable Sales Growth in Four Years
- Sales Growth Highlight: Kohl's reported its best comparable sales growth in four years, despite a 1.7% decline in net sales, indicating the company's potential to gradually regain market share amid challenges.
- Financial Performance Beats Expectations: The company achieved net sales of $3 billion in Q1, exceeding Wall Street's $2.99 billion forecast, with a loss per share of 13 cents, better than the expected 19 cents, suggesting improved financial management.
- Full-Year Outlook Reaffirmed: Kohl's reaffirmed its full-year outlook, expecting net and comparable sales to decline by 2% to flat, with adjusted earnings per share projected between $1 and $1.60, reflecting confidence in future performance.
- Positive Market Reaction: Following the earnings report, Kohl's stock jumped over 8% in premarket trading, reflecting investor optimism regarding the company's improved sales performance and operational efficiency.
See More
