Kohl's Q1 Earnings Coming Up: What Investors Need to Understand

Kohl's Corporation KSS is likely to register a top-line decline when it reports first-quarter fiscal 2025 earnings on May 29. The Zacks Consensus Estimate for quarterly revenues is pegged at $3.2 billion, which indicates a 5.2% decrease from the year-ago quarter’s reported figure.

For the fiscal first quarter, the consensus mark for Kohl's bottom line has narrowed from a loss of 28 cents to a loss of 22 cents in the last seven days. The projection indicates an improvement from a loss of 24 cents per share reported in the year-ago quarter. KSS has a trailing four-quarter average negative earnings surprise of 166.4%. (Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.)

Kohl's Corporation Price and EPS Surprise

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

Things to Know Ahead of KSS’ Q1 Earnings

Kohl's continues to bear the brunt of ongoing macroeconomic uncertainty and a challenging consumer environment. It continues to face headwinds in its e-commerce segment. The downside can be attributed to weakness in the home category, particularly within Legacy Home offerings.

In its last earnings call, management highlighted that, given the ongoing macroeconomic uncertainty, first-quarter fiscal 2025 comparable sales are expected to be at the lower end of the company’s full-year sales guidance range, which projects a decline of 5% to 7%. Our model suggests a comparable sales decline of 6% in the to-be-reported quarter.

Despite ongoing challenges, Kohl’s is making meaningful progress in underpenetrated categories such as home decor, gifting, impulse purchases and baby products, which is likely to have provided some cushion in the fiscal first quarter. The company’s continued emphasis on strategic growth initiatives — including enhancing the customer experience, optimizing inventory and maintaining effective cost management — bodes well. In addition, KSS’ strategic partnership with Sephora is expected to have contributed positively in the to-be-reported 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 to buy or sell before they’re reported with our Earnings ESP Filter.

Kohl's currently carries a Zacks Rank #3 and has an Earnings ESP of 0.00%.

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.

Five Below, Inc. FIVE currently has an Earnings ESP of +4.18% and a Zacks Rank of 3. FIVE is likely to register a top-line increase when it reports fourth-quarter fiscal 2025 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $961.1 million, indicating an 18.4% rise from the figure reported in the prior-year quarter. You can see the complete list of today’s Zacks #1 Rank stocks here.

The consensus estimate for Five Below’s EPS is pegged at 80 cents, implying a 33.3% jump from the year-ago quarter. FIVE delivered an earnings surprise of 3% in the last quarter.

Gap GAP has an Earnings ESP of +3.03% and a Zacks Rank of 3 at present. GAP is likely to register top-line growth when it releases first-quarter 2025 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $3.42 billion, which implies growth of 0.8% from the figure reported in the year-ago quarter.

The consensus estimate for GAP’s quarterly EPS has increased by a penny in the past 30 days to 44 cents, implying growth of 7.3% from the year-ago quarter’s number. GAP delivered an earnings surprise of 77.5%, on average, in the trailing four quarters.

Burlington Stores BURL has an Earnings ESP of +3.45% and currently carries a Zacks Rank of 3. BURL’s top line is anticipated to advance year over year when it reports first-quarter fiscal 2025 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $2.52 billion, which suggests a 6.9% rise from the figure reported in the year-ago quarter. 

The consensus estimate for Five Below’s first-quarter earnings is pegged at $1.40 per share, unchanged year over year. BURL has a trailing four-quarter earnings surprise of 17.9%, on average.

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

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