Kohl’s Corp reported adjusted earnings per share of $1.28 for the second quarter, exceeding the $0.57 estimate by 124.6%, while shares fell roughly 7% in premarket trading.
The company raised its full-year adjusted EPS guidance to a range of $1.80 to $2.40, up from the prior $1.00 to $1.60, citing $150 million in tariff refunds that contributed $0.65 per share. Gross margin expanded to 43.0% from 39.9% a year ago, with tariff refunds accounting for 305 basis points of the improvement. Comparable sales declined 0.9%, though marketplace revenue surged 88% in the quarter.
Own-label brands drove growth, with sales rising 3% overall. Juniors and toys posted double-digit gains, while women’s apparel fell 1.5%. The company’s proprietary activewear brands, including Tek Gear and FLX, outperformed. The Kohl’s Card segment turned positive with a 1.0% increase in cardholder sales, reversing a prior decline.
The retailer’s balance sheet strengthened, with cash rising to $821 million and long-term debt at its lowest level since 2007. Management repurchased $113 million in bonds at a discount and initiated a $100 million share buyback, the first since 2022.
Analysts remain cautious, with JPMorgan maintaining an Underweight rating and a $17 price target. Kohl’s has now beaten EPS estimates in four consecutive quarters, including beats of 155.6%, 25.9%, and 38.1% in prior periods.
Looking ahead, Kohl’s scheduled its next earnings release for October 2026, with analysts estimating EPS of $0.05 and revenue of $3.39 billion. The holiday quarter is projected to deliver EPS of $0.94 as the company continues to scale its marketplace and execute on capital allocation plans.
