Kohl's Q3 Earnings Coming Up: Factors Investors Need to Understand

Kohl's Corporation (KSS) is likely to register top and bottom-line declines when it reports third-quarter fiscal 2025 results on Nov. 25. The Zacks Consensus Estimate for quarterly sales is currently pegged at $3.49 billion, showing a 5.9% decrease from the year-ago quarter’s tally.

The consensus earnings estimate for the fiscal third quarter has slipped 2 cents over the past 30 days to a loss of 19 cents per share. This reflects a year-over-year plunge of 195% from the year-earlier quarter.

The company delivered an earnings surprise of 29.2%, on average, in the trailing four quarters. In the last reported quarter, Kohl's recorded an earnings surprise of 69.7%.

Kohl's Corporation Price, Consensus and EPS Surprise

Kohl's Corporation price-consensus-eps-surprise-chart | Kohl's Corporation Quote

Factors Likely to Impact KSS’ Q3 Earnings

Kohl’s has been operating in a challenged demand environment, with its core lower- to middle-income customers remaining pressured and store traffic staying soft. The company has been seeing continued weakness in its Kohl’s Card customer, with sales down in the low teens in the second quarter of fiscal 2025, reducing trips despite July stabilization. These pressures have been keeping discretionary spending subdued and are likely to have weighed on comps heading into the fiscal third quarter. Our model indicates a comparable sales decline of 4.6% in the to-be-reported quarter.

Kohl’s has been heading into the back half with increasing cost and pricing pressures, as expanded coupon eligibility and looming tariff impacts are expected to weigh more heavily in the fiscal third quarter. While proprietary brand mix has been improving and inventory has been managed with discipline, the company has been relying on stronger value messaging and seeing higher digital penetration, both of which have been continuing to limit near-term margin expansion.

Kohl’s has been seeing uneven category trends, with Kids and Men’s, both important to back-to-school, continuing to lag in the fiscal second quarter. Although August trends in denim, backpacks and key proprietary brands have been showing improvement, the company has been rebuilding inventory depth following earlier receipt reductions, which might have tempered near-term gains. These factors are likely to have shaped a cautious backdrop as Kohl’s heads into its upcoming results.

Earnings Whispers for KSS Stock

Our proven model predicts 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 chance of an earnings beat. This is exactly the case here.

Kohl's currently has an Earnings ESP of +1.77% and a Zacks Rank of 3. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.

Other Stocks With the Favorable Combination

Here are some other companies worth considering, as our model shows that these, too, have the right combination of elements to beat on earnings this reporting cycle.

Five Below, Inc. (FIVE) currently has an Earnings ESP of +74.71% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

FIVE is likely to register a top-line increase when it reports third-quarter fiscal 2025 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $969.9 million, indicating a 15% rise from the figure reported in the prior-year quarter. The consensus estimate for Five Below’s earnings is pegged at 22 cents per share, implying a 47.6% decline from the year-ago quarter. FIVE delivered a trailing four-quarter earnings surprise of 50.5%, on average.

Ulta Beauty, Inc. (ULTA) has an Earnings ESP of +0.24% and a Zacks Rank of 3 at present. The consensus estimate for Ulta Beauty’s third-quarter fiscal 2025 earnings is pegged at $4.47 per share, implying a decline of 13% from the year-ago quarter.

For Ulta Beauty’s quarterly revenues, the consensus mark is pegged at $2.7 billion, which indicates an increase of 7.1% from the year-ago quarter. ULTA delivered a trailing four-quarter earnings surprise of 16.3%, on average.

Dollar General Corporation (DG) currently has an Earnings ESP of +7.29% and a Zacks Rank #3. The Zacks Consensus Estimate for DG’s third-quarter fiscal 2025 earnings per share is pegged at 92 cents, implying 3.4% year-over-year growth.

The Zacks Consensus Estimate for quarterly revenues is pegged at $10.61 billion, which indicates an increase of 4.2% from the figure reported in the prior-year quarter. Dollar General delivered a trailing four-quarter earnings surprise of 11.3%, on average.

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

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