Kohl’s ended Q4 with results that met Wall Street’s revenue expectations and delivered a significant non-GAAP profit upside, prompting a positive market reaction. Management attributed the quarter’s margin improvement and profitability to disciplined inventory management, lower store expenses, and a focus on core basics and essentials. CEO Michael Bender highlighted that weather disruptions and underperformance in fall seasonal assortments contributed to sales softness, while strong execution in proprietary brands—particularly in juniors, petites, and accessories—helped offset declines. Bender emphasized, “We are ending 2025 in a stronger position than we started, though important work remains ahead of us.”
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Revenue: $5.17 billion vs analyst estimates of $5.18 billion (4.2% year-on-year decline, in line)
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Adjusted EPS: $1.07 vs analyst estimates of $0.84 (26.7% beat)
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Adjusted EBITDA: $386 million vs analyst estimates of $370.4 million (7.5% margin, 4.2% beat)
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Adjusted EPS guidance for the upcoming financial year 2026 is $1.30 at the midpoint, missing analyst estimates by 3.7%
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Operating Margin: 4.1%, up from 2.3% in the same quarter last year
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Locations: 1,153 at quarter end, down from 1,175 in the same quarter last year
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Same-Store Sales fell 2.8% year on year (-6.1% in the same quarter last year)
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Market Capitalization: $1.46 billion
While we enjoy listening to the management’s commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
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Charles P. Grom (Gordon Haskett): Asked about the specifics of the “By Kohl’s” campaign and expected improvement in Kohl’s cardholder comps. CEO Michael Bender detailed the campaign’s focus on showcasing proprietary brands, while CFO Jill Timm expects comps to improve gradually through the year as brand investments take hold.
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Mark R. Altschwager (Baird): Inquired about immediate catalysts for recapturing market share and the scaling timeline for assortment pivots. Bender highlighted proprietary brands and value pricing as key near-term drivers, with new impulse and deal bar concepts supporting incremental growth.
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Robert Drbul (BTIG): Questioned opportunities in the women’s and home categories and marketing investment strategies. Timm emphasized juniors’ momentum, assortment curation in women’s, and corrected home category inventory depth, while confirming a measured but ROI-focused marketing approach.
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Dana Telsey (Telsey Group): Asked about store base optimization and changes to in-store experience. Bender stated there are no major store count changes planned, while Timm emphasized in-store investments in signage, curated zones, and proprietary brand showcases.
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Oliver Chen (TD Cowen): Queried the timing of trip assurance improvements, drivers of Other Revenue, and necessary steps to achieve positive store comps. Bender and Timm pointed to ongoing assortment curation, proprietary brand focus, and enhanced inventory depth as central to regaining sales momentum.