Kohl`s Corp
Q3 2026 Earnings
Market Reaction
S&P 500 over the same 30 days: +1.90%.
Did KSS Beat Earnings? Q3 2026 Results
Kohl's delivered a sharply positive earnings surprise in its fiscal third quarter of 2026, posting adjusted diluted EPS of $0.10 against a consensus estimate of negative $0.18, a 155.77% beat, while revenue of $3.58 billion cleared Wall Street's $3.37 billion forecast by 6.14%, even as total revenue slipped 3.6% year-over-year. The standout driver behind the profit beat was gross margin expansion of 51 basis points to 39.6%, fueled by stronger proprietary brand penetration and disciplined inventory management that brought stock levels down 5% to $3.90 billion. Notably, revolving credit borrowings plummeted to $45 million from $749 million a year ago, a balance sheet improvement that underscores the operational discipline the newly permanent CEO Michael Bender has emphasized since taking the interim role in May. The results sparked a 26% single-session stock rally, though some analysts, wary of persistently declining comparable sales, maintained sell ratings, reflecting a broader debate about long-term strategy that echoes challenges seen across <a href="https://247wallst.com/investing/2025/10/29/kraft-heinz-shares-fall-after-mixed-q3-earnings/">other consumer-facing companies</a>. Kohl's raised its full-year 2025 outlook, now guiding for adjusted diluted EPS of $1.25 to $1.45.
- Gross margin increased 51 basis points driven by greater proprietary brand penetration, category mix benefits, and strong inventory management
- SG&A expense declined 2.1% from tightly managed expenses in stores, marketing, and fulfillment
- Proprietary brands grew 1% in Q3
- Positive growth in Juniors, Petites, and Accessories categories
- Impulse queueing line rollout delivered over 40% sales growth in Q3
- Inventory decreased 5% year-over-year reflecting strong inventory management
- Borrowings under revolving credit facility decreased $704 million year-over-year
“We are pleased with Kohl's third quarter results, marking a third consecutive quarter of delivering top-line and bottom-line performance ahead of our expectations. These results are a direct reflection of the progress we are making against our 2025 initiatives, reinforcing our confidence as we continue to move in the right direction. We are focused on building on this momentum, as we remain committed to delivering quality products, great value, and a frictionless experience to our customers in an uncertain macroeconomic environment.”
Kohl's CEO, on the earnings call
Forward Guidance & Outlook
For full year 2025, Kohl's raised its financial outlook and now expects: net sales to decrease 3.5% to 4% versus 2024; comparable sales to decrease 2.5% to 3%; adjusted operating margin of 3.1% to 3.2%; adjusted diluted EPS of $1.25 to $1.45; capital expenditures of approximately $400 million. The company plans to invest capex in completing the Sephora rollout, expanding impulse queuing fixtures, and enhancing the omni-channel experience. Kohl's remains committed to an annual cash dividend of $0.50 per share and intends to resume share repurchases over the long-term following improvement in overall leverage.
KSS YoY Financials
Figures from SEC filings and company reports. Not investment advice.