By Connor Hart
Kohl's turnaround encountered some setbacks in the fourth quarter, but Chief Executive Michael Bender says progress isn't always linear.
The department-store chain still ended 2025 on stronger footing than when the year started, he said, even if results in the recent quarter were softer than expected.
"While we've made progress addressing issues and strengthening areas of our foundation, that work will continue to be the focus for most of 2026," Bender said on a call with analysts Tuesday.
Shares initially fell in premarket trading, as Kohl's logged lower sales in the recent quarter and issued an outlook that called for its top line to at best remain stagnant this year. But investors later rallied behind the company's long-term goals, and the stock reversed course.
Shares were recently trading 8.1% higher at $16.00. The stock is up about 33% over the past year--in part because the retailer has been the focus of meme-stock attention.
For its three months ended Jan. 31, Kohl's sales slipped 3.9% to $4.97 billion. Comparable sales, or those from stores and digital channels open for at least a year, fell 2.8%. Analysts were looking for a 1.5% decline, according to FactSet.
Bender said sales were hurt late in the quarter by severe winter weather that prompted the company to close about half of its stores. At the same time, problems with inventory allocation resulted in stores not always having the right products in the right quantities. And Kohl's lost some market share during important shopping windows such as Black Friday and the week after Christmas, he said.
Currently, Kohl's core low- to middle-income shoppers continue to feel stressed, and they are increasingly seeking value and cutting back on discretionary spending, Bender said. In order to engage these customers, the company needs to deliver clearer and stronger promotional messaging, while also providing more competitive pricing and deals.
Beyond retooling its promotional strategy, Kohl's this year will continue working to improve its merchandising assortment. The company plans to exit underperforming styles and reinvest those savings in better-performing categories, Bender said, resulting in an overall more curated assortment.
Kohl's has spent much of the past few years repositioning departments in its stores and restoring previously scaled-back categories, as the company attempts to come back from years of missteps and sales declines. The job fell to Bender, who was named the company's fourth CEO in as many years in November. He had served as interim CEO since last spring, after its then chief, Ashley Buchanan, was fired for violating the company's ethics code.
Categories such as accessories and beauty--thanks in large part to the company's Sephora partnership--performed well during the latest quarter. However, these gains were offset by weak trends across footwear and home goods, which saw soft demand.
Kohl's posted a profit of $125 million, or $1.07 a share, during the recent quarter, up from $48 million, or 43 cents a share, a year earlier. Adjusted earnings of 95 cents a share topped analyst expectations for 86 cents a share.
Looking ahead, the company guided for adjusted earnings of $1 a share to $1.60 a share this year, compared with analyst views for $1.37 a share.
Comparable sales are projected to be down 2% to flat for the year, as are net sales. Wall Street projected same-store sales to slip 0.6%.
Chief Financial Officer Jill Timm said the outlook reflects Kohl's confidence to execute against its turnaround initiatives, while still considering the uncertain macroeconomic environment in which the company continues to operate.
Write to Connor Hart at connor.hart@wsj.com
(END) Dow Jones Newswires
March 10, 2026 11:22 ET (15:22 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
Comments