Kohl's (NYSE:KSS) Reports Q4 CY2025 Revenue Meeting Expectations, Shares Fall 10.1%

Kohl’s Q4 2025 Earnings Overview

Kohl’s (NYSE:KSS), a leading department store retailer, matched analysts’ revenue projections for the fourth quarter of fiscal 2025, posting $5.17 billion in sales—a 4.2% decrease compared to the same period last year. The company’s adjusted earnings per share reached $1.07, surpassing consensus estimates by 26.7%.

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Highlights from Q4 2025

• Revenue: $5.17 billion, nearly matching the $5.18 billion forecast (down 4.2% year-over-year)
• Adjusted EPS: $1.07, beating the $0.84 estimate by 26.7%
• Same-store sales guidance for FY2026: Projected at -1% at the midpoint, in line with expectations
• Adjusted EPS guidance for FY2026: $1.30 at the midpoint, aligning with analyst forecasts
• Operating Margin: 4.1%, up from 2.3% in the prior year’s quarter
• Free Cash Flow Margin: 13.3%, an increase from 9.2% a year ago
• Same-store sales: Fell 2.8% year-over-year (compared to a 6.1% drop in the same quarter last year)
• Market Cap: $1.66 billion

CEO Michael J. Bender commented, “We are closing out 2025 in a stronger position than where we began, though there is still important work ahead. Our focus this year has been on rebuilding our foundation to stabilize operations and set the stage for future growth. Despite softer-than-expected top-line results in Q4, we managed the business with discipline, improved our earnings, and generated strong cash flow, all of which contributed to a healthier balance sheet.”

About Kohl’s

Originating as a small grocery store in Milwaukee, Wisconsin, Kohl’s has grown into a nationwide department store chain offering apparel, beauty products, electronics, and home essentials.

Revenue Trends

Consistent revenue growth is a hallmark of a high-quality business. While any company can have a strong quarter, sustained long-term growth is more telling.

With $15.53 billion in sales over the past year, Kohl’s stands as a major player in the consumer retail sector, benefiting from strong brand recognition. However, its large market presence can make further growth challenging. To increase sales, Kohl’s may need to consider price adjustments or explore international markets.

Over the last three years, Kohl’s has faced difficulties in driving demand, with annual sales declining by 5%. This trend is partly due to limited new store openings and weaker performance at existing locations.

Kohl’s Quarterly Revenue

In the most recent quarter, revenue dropped by 4.2% year-over-year to $5.17 billion, closely matching Wall Street’s expectations.

Looking forward, analysts anticipate a further 1.2% decline in revenue over the next year, highlighting ongoing demand challenges for the company.

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Store Operations

Total Store Count

The number of locations a retailer operates often determines its revenue potential. Over the past two years, Kohl’s has maintained a steady store count, unlike some competitors who have expanded.

Keeping the store footprint unchanged typically suggests stable demand and a focus on improving operational efficiency. Note that Kohl’s does not report store numbers every quarter, so some data points may be missing.

Kohl’s Operating Locations

Performance of Existing Stores

Store count tells only part of the story. The performance of established stores and online sales is crucial for management decisions on expansion or downsizing. Same-store sales, which track year-over-year growth at locations open for at least a year, provide valuable insight.

Over the past two years, Kohl’s has seen its same-store sales decline by an average of 4.7% annually. This downward trend is concerning, especially if the company were to open new stores simply to boost overall sales numbers.

Kohl’s Same-Store Sales Growth

In the latest quarter, same-store sales dropped 2.8% year-over-year, marking a further slowdown compared to previous periods. The hope is that Kohl’s can reverse this trend going forward.

Summary of Q4 Results

Same-store sales fell short of expectations, a negative sign for any retailer. The company projects a continued decline in same-store sales for the next fiscal year, consistent with analyst forecasts. Full-year earnings guidance also met expectations. Overall, the report lacked positive surprises, and the stock price dropped 10.1% to $13.30 following the announcement.

Considering an investment in Kohl’s? It’s important to weigh the company’s valuation, business fundamentals, and recent performance.