Kohl's Falls Short of Earnings Estimates, Sparking Questions About Stock Purchase
In a surprising turn of events, Kohl's (KSS) shares soared by 24% on Aug. 27, 2025, following the release of the retailer's second-quarter earnings update. Despite the positive stock movement, the company's performance is not considered a clear turnaround for Kohl's business.
The retailer reported adjusted earnings of $0.56 per share for the second quarter, significantly exceeding Wall Street analysts' expectations of $0.29. This impressive earnings figure, however, was not enough to offset the weak revenue and earnings the company has been experiencing since the post-pandemic bounce back.
Kohl's revenue for the second quarter of 2025 was $3.35 billion, slightly higher than the projected $3.32 billion. However, this represents a 5.1% decrease compared to the same quarter of 2024. The company's same-store sales (comps) for the second quarter also decreased by 4.2%.
The retailer's success can primarily be attributed to an increase in the amount customers spent on each visit rather than an increase in customer traffic. This trend suggests that while Kohl's is not resonating well with customers at the moment, those who do visit are spending more.
The second-quarter earnings update contained both good news and bad news for Kohl's. On the positive side, the company's gross margin improved, and costs were cut during the quarter. On the negative side, the retailer is still facing a lot of uncertainty due to the lack of a permanent CEO, with the previous CEO having been replaced three months ago, and the board of directors yet to find a permanent replacement.
The current interim CEO of Kohl's is Michael Bender, who took over after Ashley Buchanan was fired in May 2025. The success of Kohl's turnaround is not considered to be on sounder footing than Dollar General's, which saw a 5.1% increase in sales and a 2.8% increase in comps for the same period.
Given the uncertainty surrounding Kohl's and the work needed to turn around the business, only aggressive investors should consider buying Kohl's stock. Wall Street analysts provided earnings expectations for Kohl's before the second quarter, and the income statement of Kohl's has been poor for some time, with weak revenue and earnings.
As the search for a permanent CEO continues, investors will be closely watching Kohl's to see if the retailer can indeed turn its fortunes around.
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