Kohl’s stock falls despite earnings beat and raised guidance

Investing.com -- Kohl’s Corporation (NYSE: KSS) reported second-quarter results that exceeded earnings expectations and raised its full-year outlook, but after initially rising, shares are now down over 8% premarket on Wednesday.

The retailer posted adjusted earnings per share of $1.28 for the second quarter, beating the analyst consensus of $0.57 by $0.71. However, revenue of $3.32 billion fell short of the $3.4 billion analyst estimate and declined 0.9% YoY.

Comparable sales also decreased 0.9% for the quarter. Gross margin expanded 305 basis points to 43.0%, aided by approximately $100 million in tariff refunds that flowed through gross margin during the quarter.

The company raised its full-year 2026 adjusted EPS guidance to a range of $1.80 to $2.40, with a midpoint of $2.10 that significantly exceeds the analyst consensus of $1.43. Kohl’s expects full-year net sales and comparable sales to decline between 1.5% and flat. The company also announced it is restarting its share repurchase program with up to $100 million in buybacks planned for 2026.

"We are confident that the work we are executing is leading us in the right direction. Our second quarter results reflect the ongoing progress against our initiatives, leading to another improvement in our comparable sales trend," said Michael Bender, Chief Executive Officer.

Operating income for the quarter was $261 million compared to $279 million in the prior year, while net income totaled $151 million. Inventory decreased 3% YoY to $2.9 billion. The company received approximately $150 million in tariff refunds during the quarter.

For the first six months of fiscal 2026, net sales decreased 1.2% to $6.3 billion, with adjusted EPS of $1.18 compared to $0.44 in the prior year period. Operating cash flow was $478 million compared to $506 million in the prior year.

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