Kohl’s Corporation Reports Second Quarter Results

August 27, 2025  by Karen Parrish in Business Strategy, Industry   

Net sales decreased 5.1% and comparable sales decreased 4.2%

Gross margin increased 28 basis points

Diluted earnings per share (“EPS”) of $1.35 and adjusted diluted EPS of $0.56^(a)

Raises full year 2025 financial outlook

Michael Bender, Kohl’s interim chief executive officer, said “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.

In addition to our top line progress, we managed the business with great discipline in the quarter. We were able to expand our gross margins, reduce our inventory, and lower our expenses, leading to solid second quarter earnings. I continue to be impressed with our entire team at Kohl’s and am thankful for all their hard work,” Bender continued.

Second Quarter 2025 Results

Comparisons refer to the 13-week period ended August 2, 2025, versus the 13-week period ended August 3, 2024

- Net sales decreased 5.1% year-over-year, to $3.3 billion, with comparable sales down 4.2%.

- Gross margin as a percentage of net sales was 39.9%, an increase of 28 basis points.

- Selling, general & administrative (SG&A) expenses decreased 4.1% year-over-year, to $1.2 billion. As a percentage of total revenue, SG&A expenses were 33.8%, an increase of 32 basis points year-over-year.

- Gain on legal settlement was $129 million from a credit card interchange fee lawsuit settlement.

- Operating income was $279 million compared to $166 million in the prior year. As a percentage of total revenue, operating income was 7.9%, an increase of 343 basis points year-over-year. Adjusted operating income was $161 million compared to $166 million in the prior year. As a percentage of total revenue, adjusted operating income was 4.6%. ^(a)

- Net income was $153 million, or $1.35 per diluted share, and adjusted net income of $64 million, or $0.56 per adjusted diluted share. This compares to net income of $66 million, or $0.59 per diluted share, in the prior year. ^(a)

- Inventory was $3.0 billion, a decrease of 5% year-over-year.

- Operating cash flow was $598 million compared to $254 million in the prior year.

- Current portion of long-term debt was reduced by $353 million through repayment of the 4.25% notes due July 2025 at maturity.

- Borrowings under revolving credit facility were $75 million, a decrease of $335 million year-over-year.

- Long-term debt increased $347 million through issuance of $360 million of 10.000% senior secured notes due 2030.

2025. Financial and Capital Allocation Outlook

For the full year 2025, the Company currently expects the following, excluding the impact of items not representative of our core operating performance:

Net sales: A decrease of (5%) to a decrease of (6%)

Comparable sales: A decrease of (4%) to a decrease of (5%)

Adjusted operating margin: In the range of 2.5% to 2.7% ^(a)

Adjusted diluted EPS: In the range of $0.50 to $0.80 ^(a)

Capital Expenditures: Approximately $400 million

Dividend: On August 12, 2025, Kohl’s Board of Directors declared a quarterly cash dividend on the Company’s common stock of $0.125 per share. The dividend is payable September 24, 2025, to shareholders of record at the close of business on September 10, 2025.

(a)

Non-GAAP financial measures. Please see the “RECONCILIATION OF NON-GAAP FINANCIAL MEASURES” for a reconciliation of operating income to adjusted operating income, net income to adjusted net income, and diluted earnings per share to adjusted diluted earnings per share.

Second Quarter 2025 Earnings Conference Call

Kohl’s will host a quarterly earnings conference call. A webcast of the conference call and the related presentation materials will be available via the Company's web site at investors.kohls.com, both live and after the call.