Kohl's Corporation Reports Mixed Financial Results for Third Quarter 2025

Kohl’s reported a net sales decrease of 2.8%, totaling $3.4 billion, with comparable sales down 1.7% year-over-year. Despite this dip, the company managed to improve its gross margin, which rose by 51 basis points to 39.6% of net sales.

The diluted earnings per share (EPS) stood at $0.07, with adjusted diluted EPS at $0.10. This marks a notable decline from the previous year's net income of $22 million, or $0.20 per diluted share. The adjusted operating income fell to $77 million, down from $98 million last year, reflecting a broader trend of rising costs and cautious consumer spending.

Kohl’s management highlighted a decrease in selling, general, and administrative (SG&A) expenses by 2.1%, amounting to $1.3 billion. However, SG&A expenses as a percentage of total revenue increased to 35.3%, illustrating the ongoing challenge of managing costs while driving sales. Operating income for the quarter was reported at $73 million, translating to 2.1% of total revenue, a decrease from last year's 2.7%.

In a significant leadership update, Kohl’s Board of Directors appointed Michael J. Bender as CEO effective immediately. Bender, who has been serving as interim CEO since May 2025, expressed optimism about the company's trajectory, stating, “We are pleased with Kohl’s third quarter results, marking a third consecutive quarter of delivering top-line and bottom-line performance ahead of our expectations.”

Bender emphasized the importance of remaining resilient amid an uncertain macroeconomic landscape and reiterated the company’s commitment to delivering quality products and a seamless shopping experience.

Kohl’s reported a 5% decrease in inventory, amounting to $3.9 billion, indicative of improved inventory management strategies. Additionally, cash flow from operating activities turned positive, providing $124 million compared to a use of $195 million in the prior year.

The company's borrowings under its revolving credit facility decreased significantly, down to $45 million from $749 million in the previous year, signaling a stronger liquidity position.

For the nine months ended November 1, 2025, Kohl’s reported a 4.0% decline in net sales, totaling $9.8 billion, with comparable sales down 3.2%. Notably, the company achieved a gain of $129 million from a legal settlement related to a credit card interchange fee lawsuit, which positively impacted net income for the year.

The company has adjusted its full-year financial outlook, predicting a decrease in net sales by 3.5% to 4% and comparable sales down 2.5% to 3%. The adjusted operating margin is projected to be between 3.1% and 3.2%, with adjusted diluted EPS expected to range from $1.25 to $1.45.

On November 12, 2025, Kohl's Board declared a quarterly cash dividend of $0.125 per share, payable on December 24, 2025, to shareholders of record by December 10, 2025. This reflects the company's commitment to returning value to its shareholders despite the challenging economic conditions.

As Kohl's moves forward, the focus will be on leveraging its strategic initiatives and improving customer experience while navigating the complexities of the retail market. With a renewed leadership perspective and a commitment to operational excellence, the company aims to stabilize its performance and position itself for long-term growth.

Kohl’s will discuss these results further during its earnings conference call at 9:00 am ET on November 25, 2025, providing additional insights into its strategies and future outlook.