Kohl’s Corp reported adjusted earnings per share of $1.28 for the second quarter of 2026, exceeding Wall Street expectations by 124.56% and nearly doubling the forecast of $0.57. Revenue totaled $3.32 billion, missing the $3.4 billion estimate by 2.35%, or $80 million.
Comparable sales declined 0.9%, while store sales fell 2.0%. Digital sales rose 2.8% and marketplace sales surged 88%, partially offsetting weakness in physical locations. Gross margin improved by 305 basis points, driven in part by approximately $150 million in tariff refunds. Selling, general and administrative expenses decreased 0.9% year-over-year.
CEO Michael Bender cited persistent macroeconomic pressures from inflation on everyday expenses such as gas and food as headwinds for consumer spending. The company’s Kohl’s Card customer base showed improvement, with sales increasing 1% after prior declines. Proprietary brands grew 3% overall, with men’s proprietary brands up in the high single digits. Inventory depth rose 6%.
Category performance varied: the home category grew 1%, led by a more than 10% year-over-year increase in home decor choice counts, while bedding and bath remained flat. Juniors sales rose 10%, and men’s business improved sequentially by 100 basis points. Footwear comps accelerated approximately 500 basis points from the first quarter, with kids footwear up mid-single digits.
Sephora at Kohl’s posted a 4% sales decline due to distribution challenges for certain brands, though fragrance and haircare outperformed while makeup and skincare lagged. Women’s business declined 1.5% overall, with active and denim segments outperforming while intimates underperformed. Accessories were flat excluding Sephora, with jewelry up mid-single digits.
The retailer maintained its full-year 2026 guidance, projecting comparable sales to decline between 1.5% and flat. Adjusted operating margin is expected to remain in a range of 3.5% to 4.0%, with adjusted earnings per share guided at $1.80 to $2.40, including about $0.65 from tariff refunds. Operating cash flow is forecast between $950 million and $1 billion, with capital spending projected at $350 million to $400 million and free cash flow expected near $600 million.
Cash and cash equivalents stood at $821 million at quarter-end, the lowest long-term debt level since 2007, and market capitalization was $2 billion. The company plans to resume share repurchases in 2026 with a $100 million buyback program, its first since 2022. Shares traded at $17.67, down 0.06% from the prior close, with a 52-week range of $11.38 to $25.22 and a 39.8% return over the past year.
