It has been about a month since the last earnings report for Kohl's (KSS). Shares have added about 4.4% in that time frame, outperforming the S&P 500.
But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is Kohl's due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its latest earnings report in order to get a better handle on the important drivers.
Kohl's Q2 Earnings Beat Estimates, Comparable Sales Dip 4.2% Y/Y
Kohl's reported second-quarter fiscal 2025 results, wherein adjusted earnings per share (EPS) of 56 cents surpassed the Zacks Consensus Estimate of 33 cents. The bottom line showed a decline from the year-ago period’s EPS of 59 cents.
Total revenues were $3,546 million, down 5% from the prior-year quarter’s $3,732 million. Nevertheless, the top line surpassed the Zacks Consensus Estimate of $3,476 million. The company’s net sales fell 5.1% to $3,347 million, while other revenues fell 3.9% to $199 million. We note that comparable sales dipped 4.2% year over year. We expected comparable sales to decrease 5.6%.
Kohl’s Quarterly Margin Highlights
Kohl's gross margin expanded 28 basis points (bps) to 39.9% in the reported quarter. We expected a gross margin increase of 20 bps. SG&A expenses dropped 4.1% to $1,199 million. As a percentage of total revenues, SG&A expenses increased 32 bps to 33.8%. We anticipated SG&A expenses, as a percentage of net sales, to increase 30 bps.
KSS posted an operating income of $279 million, up from $166 million in the year-ago period. The operating income margin expanded 343 bps to 7.9%.
KSS’ Financial Health Snapshot & Other Updates
Kohl's ended the quarter with cash and cash equivalents of $174 million and shareholders’ equity of $3,927 million. Net cash provided by operating activities was $506 million for the six months ending Aug. 2, 2025.
Management expects capital expenditures of $400 million for fiscal 2025.
On Aug. 12, 2025, Kohl’s declared a quarterly cash dividend of 12.50 cents per share, payable Sept. 24, to its shareholders of record as of Sept. 10.
What to Expect From KSS in FY25?
For fiscal 2025, Kohl's continues to foresee a net sales decline of 5-6%. Comparable sales are projected to decline 4-5% during the year. The operating margin is expected to be in the range of 2.5-2.7% in fiscal 2025. Management anticipates full-year EPS to be between 50 cents and 80 cents.
How Have Estimates Been Moving Since Then?
Since the earnings release, investors have witnessed a flat trend in estimates revision.
The consensus estimate has shifted 15.83% due to these changes.
VGM Scores
At this time, Kohl's has a strong Growth Score of A, a score with the same score on the momentum front. Following the exact same course, the stock has a score of A on the value side, putting it in the top 20% for value investors.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Kohl's has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
Kohl's is part of the Zacks Retail - Regional Department Stores industry. Over the past month, Dillard's (DDS), a stock from the same industry, has gained 11.6%. The company reported its results for the quarter ended July 2025 more than a month ago.
Dillard's reported revenues of $1.51 billion in the last reported quarter, representing a year-over-year change of +1.6%. EPS of $4.66 for the same period compares with $4.59 a year ago.
For the current quarter, Dillard's is expected to post earnings of $6.48 per share, indicating a change of -16.2% from the year-ago quarter. The Zacks Consensus Estimate has changed -0.7% over the last 30 days.
Dillard's has a Zacks Rank #1 (Strong Buy) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of F.
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Kohl's Corporation (KSS): Free Stock Analysis Report Dillard's, Inc. (DDS): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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