Company Reports

We assign a no-moat rating to Kohl's, which has had consistently declining sales over the past 10 years. We think its competitors, such as wide-moat Amazon and other online sellers, discount, and specialty retailers, will continue to take apparel sales from it and other department stores. Thus, while Kohl’s has responded to threats with increased e-commerce, improved merchandising, and an enhanced loyalty program, we project its operating margins in the midsingle digits in the long run, well below prepandemic levels.

Kohl's comparable sales fell 0.9% in 2026's second quarter. Including a $100 million benefit from a tariff refund, gross margin on sales rose 305 basis points to 43%. EPS was $1.28, up from $0.56 (adjusted).

We assign a no-moat rating to Kohl's, which has had consistently declining sales over the past 10 years. We think its competitors, such as wide-moat Amazon and other online sellers, discount, and specialty retailers, will continue to take apparel sales from it and other department stores. Thus, while Kohl’s has responded to threats with increased e-commerce, improved merchandising, and an enhanced loyalty program, we project its operating margins in the midsingle digits in the long run, well below prepandemic levels.

In 2026's first quarter, Kohl's reported a 1.1% comparable sales decline, a 39.9% gross margin (up 4 percentage points year over year on higher private-label sales), a 1.4% operating margin (down from 1.9%), and an EPS loss of $0.13 (unchanged). Digital sales grew 4% but store sales declined.

We assign a no-moat rating to Kohl's, which has had consistently declining sales over the past 10 years. We think its competitors, such as wide-moat Amazon and other online sellers, discount, and specialty retailers, will continue to siphon apparel sales from it and other department stores. Thus, while Kohl’s has responded to threats with increased e-commerce, improved merchandising, and an enhanced loyalty program, we project its operating margins in the midsingle digits in the long run, well below prepandemic levels.

Kohl's fourth-quarter comparable sales fell 2.8% as its holiday offerings failed to draw consumers from rivals. Its operating margin reached 4.1% (up 40 basis points on an adjusted basis), thanks to a 20-basis-point improvement in gross margin (to 33.1%) and a 4.9% reduction in operating expenses.

We assign a no-moat rating to Kohl's, which has had consistently declining sales over the past 10 years. We think its competitors, such as wide-moat Amazon and other online sellers, discount, and specialty retailers, will continue to siphon apparel sales from it and other department stores. Thus, while Kohl’s has responded to threats with increased e-commerce, improved merchandising, and an enhanced loyalty program, we project its operating margins in the midsingle digits in the long run, well below prepandemic levels.

In the third quarter, Kohl's had a same-store sales decline of 1.7%, a 39.6% gross margin (up from 39.1%), a 2.2% adjusted operating margin (down from 2.6%), and $0.10 in adjusted EPS (down from $0.20). Its inventory fell 5% year over year.

We assign a no-moat rating to Kohl's, which has had consistently declining sales over the past 10 years. We think its competitors, such as wide-moat Amazon and other online sellers, discount, and specialty retailers, will continue to siphon apparel sales from it and other department stores. Thus, while Kohl’s has responded to threats with increased e-commerce, improved merchandising, and an enhanced loyalty program, we project its operating margins in the midsingle digits in the long run, well below prepandemic levels.

Kohl's comparable sales fell 4.2% in second-quarter 2025. Gross and adjusted operating margins were 39.9% (from 39.6% last year) and 4.6% (from 4.4%), respectively, on higher sales of private-label brands, operating cost cuts, and a 5% decrease in inventory. Adjusted EPS was $0.56 (down from $0.59).

On July 22, Kohl's stock rallied nearly 40% on about 10 times normal trading volume as retail investors promoted it heavily on social media. Rather than fundamentals, these traders were attracted to Kohl's short interest of more than 50 million shares, or about half the available float.

We assign a no-moat rating to Kohl's, which has had consistently declining sales over the past 10 years. We think its competitors, such as wide-moat Amazon and other online sellers, discount, and specialty retailers, will continue to siphon apparel sales from it and other department stores. Thus, while Kohl’s has responded to threats with increased e-commerce, improved merchandising, and an enhanced loyalty program, we project its operating margins in the midsingle digits in the long run, well below prepandemic levels.

Kohl's had a 3.9% comparable sales decline, a 39.9% gross margin on net sales, a 1.9% operating margin, and a loss per share of $0.13 in its first quarter. The report followed the naming of Michael Bender as interim chief executive officer at the beginning of May.

We assign a no-moat rating to Kohl's, which has had consistently declining sales over the past 10 years. We think its competitors, such as wide-moat Amazon and other online sellers, discount, and specialty retailers, will continue to siphon apparel sales from it and other department stores. Thus, while Kohl’s has responded to threats with increased e-commerce, improved merchandising, and an enhanced loyalty program, we project its operating margins in the midsingle digits in the long run, well below prepandemic levels.

Ashley Buchanan has been ousted as Kohl's CEO after less than four months due to a conflict of interest. Chair Michael Bender will serve as interim CEO. Kohl's also provided preliminary first-quarter results, including comparable sales down 4%-4.3% and a loss per share of $0.20-$0.24.

We assign a no-moat rating to Kohl's, which has had consistently declining sales over the past 10 years. We think its competitors, such as wide-moat Amazon and other online sellers, discount, and specialty retailers, will continue to siphon apparel sales from it and other department stores. Thus, while Kohl’s has responded to threats with increased e-commerce, improved merchandising, and an enhanced loyalty program, we project its operating margins will be in the midsingle digits in the long run, well below prepandemic levels.

Although no-moat Kohl’s fourth-quarter sales were slightly better than feared, bleak 2025 guidance caused the shares to crash to multidecade lows on March 11. The report was the company’s first under CEO Ashley Buchanan, who made it clear that much work needs to be done in terms of merchandising, promotions, and store operations before results improve. We expect to reduce our $45 fair value estimate by a high-single-digit percentage, but the shares remain very undervalued, in our view. Despite its problems, Kohl’s has strengths, including its reputation for value, partnership with Sephora (comparable sales growth of 13% in the quarter), loyalty program of more than 30 million members, substantial real estate ownership, and free cash flow generation.

We assign a no-moat rating to Kohl's, which has had consistently declining sales over the past 10 years. We think its competitors, such as wide-moat Amazon and other online sellers, discount, and specialty retailers, will continue to siphon apparel sales from it and other department stores. Thus, while Kohl’s has responded to threats with increased e-commerce, improved merchandising, and an enhanced loyalty program, we project its operating margins will be in the midsingle digits in the long run, well below prepandemic levels. Kohl’s has strengths, including its reputation for reasonable prices, off-mall locations, and more than 30 million loyalty members. However, that its store visitation has been declining, and sales per square foot have fallen since 2010 despite an increase in annual e-commerce from about $700 million in 2010 to around $5 billion at present. We believe Kohl’s large fleet of big-box stores is unnecessary in an increasingly fragmented market.

No-moat Kohl’s shares plunged by a midteens percentage in Nov. 26 trading after the company announced abysmal third-quarter results and a leadership change. The company is entering the critical holiday shopping period with little momentum and slashed its full-year 2024 earnings per share guidance to $1.20-$1.50 from $1.75-$2.25. We expect to lower our $1.90 EPS forecast to within the new range and reduce our $48 fair value estimate by a high-single-digit rate. Even so, we regard the shares as very undervalued, given Kohl's assets and prospects for improved cash flow.

We assign a no-moat rating to Kohl's, which has lower sales now than it did 10 years ago despite expanding its store base. We think its competitors, such as wide-moat Amazon and other online sellers, discount, and specialty retailers, will continue to siphon apparel sales from it and other department stores. Thus, while Kohl’s has responded to threats with increased e-commerce, improved merchandising, and an enhanced loyalty program, its operating margins have declined from the low-double digits over the past 10 years, and we do not expect they will rise above the midsingle digits over the next 10. Kohl’s has strengths, including its reputation for reasonable prices and more than 30 million loyalty members. Also, unlike some peers, it does not have large numbers of stores in struggling indoor malls. We think, however, that its store visitation is declining. Sales per square foot have declined since 2010 despite an increase in annual e-commerce from about $700 million in 2010 to around $5 billion at present. We believe Kohl’s large fleet of big-box stores is unnecessary in an increasingly fragmented market.