This holiday season could shape up to be challenging for retailers as budget-conscious shoppers watch every dollar. Even so, department store giant Kohl's could be well-positioned to come out ahead.
In a research note on Thursday, Gordon Haskett analyst Chuck Grom asserted his faith in Kohl's turnaround plan under CEO Michael Bender, saying the company's revamping of its more-affordable house brands could make it a "big winner" this holiday season. The firm upgraded Kohl's stock to Buy from Hold with a $27 price target.
Kohl's stock jumped 12% to $24.71 Thursday and was heading for its highest close since Dec. 2, 2025, according to Dow Jones Market Data.
Prior to Bender's taking the helm in late 2025, Kohl's had scaled back its private brands, which dropped to account for 31% of sales, down from 55%, Grom noted. Reviving this segment could offer price-conscious shoppers some relief and increase sales, particularly of women's clothing, which makes up about 30% of total sales.
Kohl's had a rocky fiscal second quarter. The company reported a 0.9% drop in comparable sales during that period, following a 1.1% decrease from the previous quarter. The sales slump has continued a yearslong downward trend that sparked the company's turnaround plan under Bender.
Grom noted the sales drop in the second quarter was mainly due to overly cautious inventory levels. But that's no longer the case. The company, he wrote, has restocked for the latter half of the year and has trimmed underperforming items in the men's and kids' clothing.
Bender focused his plan on recapturing former customers by rebuilding private labels, increasing budget-friendly items, and improving the in-store experience.
Grom's bullish sentiments, however, stand out on Wall Street. Seven out of 16 analysts polled by FactSet recommend selling the stock while only two have a Buy rating.
Rising inflationary pressures and weaker sales have fueled bearish sentiment. As of the second quarter, Kohl's comparable sales had fallen for 18 straight periods as the retailer has struggled to catch up with online rivals.
Shares of Macy's and Burlington Stores were higher Thursday, rising 2.1% and 1.7%, respectively.
But those advances were nowhere near Kohl's sharp gain.
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