Kohl's to Report Q2 Earnings: Essential Insights Ahead of the Report

Kohl's Corporation (KSS) is likely to report top and bottom-line declines when it reports second-quarter fiscal 2025 results on Aug. 27. The Zacks Consensus Estimate for quarterly sales is currently pegged at $3.48 billion, showing a 6.9% decrease from the year-ago quarter’s tally.

The consensus mark for earnings for the fiscal second quarter has been stable over the past 30 days at 33 cents a share. This reflects a year-over-year plunge of 44.1% from the year-earlier quarter.

The company delivered an earnings surprise of 18.8%, on average, in the trailing four quarters. In the last reported fiscal quarter, Kohl's recorded an earnings surprise of 40.9%.

Factors Likely to Impact KSS’ Q2 Earnings

Kohl's has been bearing the brunt of ongoing macroeconomic uncertainty and a cautious consumer environment. The company faces persistent headwinds in its digital business, largely due to softness in the home category, particularly within its Legacy Home offerings, and intense online competition.

Kohl’s has been grappling with a tough operating backdrop, with external headwinds like shifting consumer behavior and unpredictable tariff developments adding to volatility. Our model suggests a comparable sales decline of 5.6% in the to-be-reported quarter.

Despite ongoing challenges, Kohl’s has been making meaningful progress in underpenetrated categories such as home decor, gifting and baby products, which is likely to have provided some cushion in the fiscal second quarter. In addition, KSS’ strategic partnership with Sephora is expected to have contributed positively in the to-be-reported quarter.

The company’s continued emphasis on strategic growth initiatives — including enhancing the customer experience, optimizing inventory and maintaining effective cost management — bodes well. Our model anticipates an SG&A cost reduction of 6.1% for the second quarter.

Earnings Whispers for KSS Stock

Our proven model doesn’t conclusively predict an earnings beat for Kohl's this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not the case here. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.

Kohl's currently has an Earnings ESP of -20.17% and a Zacks Rank of 3.

Stocks With the Favorable Combination

Here are a few companies, which according to our model, have the right combination of elements to come up with an earnings beat this reporting cycle:

Abercrombie & Fitch Co. (ANF) has an Earnings ESP of +2.62% and a Zacks Rank of 3. ANF’s earnings for the second quarter of fiscal 2025 are expected to decrease 9.2% on a year-over-year basis. The consensus mark for its quarterly earnings has moved up 0.9% to $2.27 per share in the past 30 days. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Abercrombie & Fitch’s quarterly revenues is pegged at $1.19 billion, which suggests growth of 4.8% from the figure reported in the prior-year quarter. ANF has a trailing four-quarter earnings surprise of 11.2%, on average.

The Gap (GAP) currently has an Earnings ESP of +1.52% and a Zacks Rank of 3. GAP is likely to register a bottom-line increase when it reports second-quarter fiscal 2025 numbers. The Zacks Consensus Estimate for quarterly earnings per share of 55 cents indicates an increase of 1.9% from the year-ago fiscal quarter’s reported number.

GAP’s top line is expected to improve from the prior-year fiscal quarter’s reported number. The consensus estimate for quarterly revenues is pegged at $3.74 billion, indicating growth of 0.5% from the prior-year fiscal quarter’s reported figure. GAP has a trailing four-quarter earnings surprise of 33.2%, on average.

DICK'S Sporting Goods (DKS) currently has an Earnings ESP of +1.13% and a Zacks Rank of 3. The company is expected to register a bottom-line decrease when it reports second-quarter fiscal 2025 results. The Zacks Consensus Estimate for quarterly earnings per share of $4.29 indicates a dip of 1.8% from the year-ago quarter.

The consensus mark for revenues is pegged at $3.60 billion, indicating a rise of 3.6% from the figure reported in the year-ago quarter. DKS has a trailing four-quarter earnings surprise of 5.6%, on average.

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This article originally published on Zacks Investment Research (zacks.com).

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