Kohl's (KSS) Q2 2025 Earnings
GAAP EPS of $1.35 includes a $129 million gain on legal settlement (credit card interchange fee lawsuit) and $11 million in impairments, store closing, and other costs, with $29 million income tax impact from these items.
How Did KSS Stock React to Q2 2025 Earnings?
S&P 500 over the same 30 days: +2.64%.
Did KSS Beat Earnings? Q2 2025 Results
Yes. Kohl's reported Q2 2025 earnings of $0.56 a share on Aug 27, 2025, beating the $0.30 consensus estimate by 88.0%. Revenue was $3.5B against a $3.4B estimate.
Kohl's delivered a sharply better-than-expected second quarter, with adjusted diluted EPS of $0.56 beating the $0.30 consensus estimate by 87.98% and revenue of $3.55 billion topping expectations by 5.27%, even as net sales slipped 5.0% year-over-year amid persistent pressure on store traffic. The standout driver was disciplined margin management, with gross margin expanding 28 basis points to 39.9% as the company leaned into proprietary brands and tighter inventory control, with stock levels down 5% to $2.99 billion. A $129 million gain from a credit card interchange fee lawsuit settlement lifted GAAP diluted EPS to $1.35, though the adjusted figure better reflects underlying operations. Kohl's stock surged roughly 20% on the report as investors responded to signs that strategic initiatives, including the completed full-chain Sephora rollout and impulse queue expansion, are beginning to take hold. The company raised its full-year 2025 outlook, now guiding for adjusted diluted EPS of $0.50 to $0.80 and comparable sales decline of 4% to 5%, while trimming its quarterly dividend to $0.13 per share to preserve balance sheet flexibility.
- Gross margin expanded 28 basis points driven by greater proprietary brand penetration, category mix benefit, and strong inventory management
- SG&A expenses decreased 4.1% year-over-year from tightly managed expenses in stores and marketing
- Inventory decreased 5% year-over-year to $3.0 billion
- Proprietary brands outperformed the company in Q2, showing 500 basis points of progressive improvement from Q1
- Impulse queue line expansion delivered 30% sales growth in Q2
- Jewelry business continued growth after investing in fashion jewelry inventory
“Kohl's second quarter performance is a testament to the progress we are making against our 2025 initiatives. This resulted in sales performance that came in ahead of our expectations. While it is clear that these initiatives are beginning to resonate with our customers, our team remains focused on delivering progressive improvement throughout the remainder of the year against a challenging economic backdrop.”
Kohl's CEO, on the earnings call
What Was Kohl's's Outlook in Q2 2025?
For full year 2025, Kohl's raised its financial outlook (excluding items not representative of core operating performance): Net sales expected to decrease 5% to 6% vs. 2024; comparable sales expected to decrease 4% to 5%; adjusted operating margin of 2.5% to 2.7%; adjusted diluted EPS of $0.50 to $0.80. Capital expenditures expected at approximately $400 million. The board reduced the annual cash dividend to $0.50 per share ($0.125 quarterly). The company plans to focus on rebuilding its cash balance, reducing revolver reliance, and capitalizing on opportunities to further reduce debt and overall leverage, with share repurchases to resume over the long term with excess cash flow following improvement in leverage.
KSS YoY Financials
| Metric | Q2 2025 | Q2 2024 | Year over year |
|---|---|---|---|
| Revenue | $3.5B | $3.7B | −5.0% |
| Gross Profit | $1.3B | $1.4B | −5.7% |
| Operating Income | $279.0M | $166.0M | +68.1% |
| Net Income | $153.0M | $66.0M | +131.8% |
KSS Revenue by Segment
Figures from SEC filings and company reports. Not investment advice.