Kohl's Q4 Results Surpass Expectations, Same-Store Sales Fall 2.8% Year Over Year

Kohl's Corporation Q4 Fiscal 2025 Earnings Overview

Kohl's Corporation (KSS) released its financial results for the fourth quarter of fiscal 2025, showing a year-over-year increase in earnings per share, which surpassed analyst expectations from Zacks. However, total revenue declined compared to the previous year and fell short of consensus projections.

For the quarter, Kohl's reported earnings of $1.07 per share, an improvement from $0.95 in the same period last year and ahead of the Zacks Consensus Estimate of $0.85 per share.

Kohl's Performance: Revenue and Sales

The company generated $5.173 billion in total revenue, representing a 4.2% decrease from $5.397 billion in the prior-year quarter and missing the expected $5.228 billion. Net sales dropped 3.9% to $4.972 billion, while other revenue streams declined by 9.5% to $201 million. Comparable sales were down 2.8% year over year, mainly due to fewer in-store transactions, slightly worse than the anticipated 2.5% decrease.

Profitability and Margin Insights

Kohl's gross margin improved by 25 basis points to reach 33.1% for the quarter, primarily due to effective inventory management that reduced the need for clearance markdowns. This gain was partially offset by increased shipping expenses, as online sales grew to 35% of total sales, up 220 basis points. Analysts had expected a 20 basis point increase in gross margin.

SG&A (selling, general, and administrative) expenses fell 4.9% to $1.463 billion. As a share of total revenue, SG&A expenses dropped by 23 basis points to 28.3%, slightly better than the projected 28.5% of net sales.

Operating income rose to $212 million, compared to $126 million in the previous year, with last year’s adjusted operating income at $202 million. The operating margin reached 4.1%, up 176 basis points year over year and 35 basis points higher than last year’s adjusted figure.

Financial Position and Recent Developments

At the end of the quarter, Kohl's held $674 million in cash and cash equivalents and reported shareholders’ equity of $4.048 billion. For the full fiscal year 2025, the company generated $1.38 billion in net cash from operating activities. Capital expenditures for fiscal 2026 are projected to be between $350 million and $400 million.

On February 25, 2026, Kohl’s announced a quarterly cash dividend of $0.125 per share, payable on April 1 to shareholders of record as of March 18.

Outlook for Fiscal 2026

Looking ahead, Kohl’s anticipates that both net sales and comparable sales for fiscal 2026 will range from a 2% decline to flat. The company expects its adjusted operating margin to be between 2.8% and 3.4%, with adjusted earnings per share forecasted in the range of $1.00 to $1.60.

Over the past three months, Kohl’s shares have dropped 37.3%, compared to a 20.5% decline for the broader regional department store industry.

Retail Stocks Worth Watching

• Five Below, Inc. (FIVE): This specialty value retailer, currently rated a Zacks Rank #1 (Strong Buy), is expected to see fiscal-year sales and earnings grow by 22.1% and 25%, respectively. Over the last four quarters, Five Below has delivered an average earnings surprise of 62.1%.
• Ross Stores, Inc. (ROST): Operating discount apparel and home fashion stores, Ross Stores holds a Zacks Rank #2 (Buy). The company has averaged a 6.1% earnings surprise over the past four quarters. Current estimates suggest sales and earnings will rise by 5.6% and 9.4%, respectively, this fiscal year.
• Williams-Sonoma, Inc. (WSM): As an omni-channel home goods retailer, Williams-Sonoma is also rated Zacks Rank #2. The company has posted an average earnings surprise of 8.6% over the last four quarters, and sales are projected to increase by 1.9% this fiscal year.

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