Kohl's Q4 Earnings on Deck: What to Expect From KSS Stock?

Kohl's Corporation KSS is likely to witness top and bottom-line declines when it reports fourth-quarter fiscal 2025 earnings on March 10, before the market opens. The Zacks Consensus Estimate for revenues is pegged at $5.23 billion, indicating a 3.1% decrease from the prior-year quarter’s reported figure. 

The consensus mark for earnings has dipped by a penny in the past 30 days to 85 cents per share, suggesting a drop of 10.5% from the figure recorded in the year-ago quarter. KSS has a trailing four-quarter earnings surprise of 73.8%, on average.

Factors Likely to Influence KSS’ Q4 Results

Kohl’s has been navigating a pressured consumer backdrop, particularly among its core middle- and lower-income shoppers. Discretionary spending remains tight, and customers are increasingly value-focused and selective, which is likely to have weighed on overall sales in the quarter under review. This is also reflected in the company’s full-year fiscal 2025 guidance, which projects net sales to decline 3.5%-4% and comparable sales to decrease 2.5%-3%.

Internal segment challenges continue to weigh on performance, particularly as footwear and kids' departments remain pressured. Management anticipates the boots business will stay soft through the fourth quarter and has proactively reduced buying quantities in response. 

Profitability in the quarter may be squeezed by a highly promotional landscape and rising operational costs. The holiday period typically brings a higher digital mix, which drives up fulfillment and shipping expenses. While sourcing teams have mitigated costs thus far, tariff-related headwinds are expected to have created margin pressure in the fourth quarter. Our model suggests a 20-basis-point contraction in the adjusted operating margin for the fourth quarter.

Despite these headwinds, Kohl’s has shown operational resilience with 1% comparable sales growth in October, driven entirely by improved traffic. The company’s strategic shift back to proprietary brands is yielding results, with these labels returning to 1% growth in the third quarter and providing the "opening price points" essential for value-conscious shoppers. This momentum is supported by disciplined inventory management, with levels down 5% year over year, ensuring a leaner stock position heading into the peak shopping season.

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.

Kohl's currently carries a Zacks Rank #4 (Sell) and an Earnings ESP of +19.44%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks With the Favorable Combination

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

Costco Wholesale Corporation COST currently has an Earnings ESP of +0.65% and a Zacks Rank of 2. The Zacks Consensus Estimate for its upcoming quarter’s revenues is pegged at $69.22 billion, indicating an 8.6% rise from the figure reported in the prior-year quarter.

The consensus estimate for Costco’s earnings is pegged at $4.55 per share, implying 13.2% growth from the year-ago quarter. COST delivered a trailing four-quarter earnings surprise of 0.5%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.

Dollar General Corporation DG currently has an Earnings ESP of +5.37% and a Zacks Rank #3. The consensus estimate for quarterly revenues is pegged at $10.78 billion, which indicates an increase of 4.6% from the figure reported in the prior-year quarter.

The Zacks Consensus Estimate for Dollar General’s upcoming quarter’s earnings per share is pegged at $1.61, implying a 4.2% year-over-year decline. DG delivered a trailing four-quarter earnings surprise of 22.9%, on average.

Dollar Tree DLTR currently has an Earnings ESP of +2.50% and a Zacks Rank #3. The Zacks Consensus Estimate for quarterly revenues is pegged at $5.46 billion, which indicates a decrease of 33.8% from the figure reported in the prior-year quarter. 

The Zacks Consensus Estimate for Dollar Tree’s upcoming quarter’s earnings per share is pegged at $2.52, implying 19.4% year-over-year growth. DG delivered a trailing four-quarter earnings surprise of 29.1%, on average.

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

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