Why Kohl's (KSS) Is Up 23.7% After Raising Profit Outlook Despite Lower Sales

• In August 2025, Kohl's Corporation reported second-quarter results with net income and earnings per share rising year-over-year, despite lower sales and revenues compared to the previous year, and subsequently raised its full-year 2025 earnings guidance with anticipated sales declines of 5% to 6%.
• This combination of higher profits and improved earnings outlook, even as sales fall, highlights a focus on cost management and profitability over topline growth.
• We'll explore how Kohl's improved profitability outlook, despite lower sales expectations, could reshape its investment narrative going forward.

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Kohl's Investment Narrative Recap

To hold Kohl's stock, investors need confidence that the company can deliver stronger profitability through disciplined expense control, even as sales are expected to decline. The raised 2025 earnings guidance spotlights improved margins as the current short-term catalyst, while the risk of ongoing declines in store transactions and the shrinking addressable market remains material for future growth.

The recent second-quarter results are particularly relevant, as they showed higher net income and earnings per share despite lower sales. This mirrors management’s focus on profit improvement rather than revenue expansion, making the sustainability of margin gains a central theme as investors weigh the effect of cost controls against persistent top-line pressures.

On the flip side, investors should keep a close eye on underlying store traffic trends, as...

Read the full narrative on Kohl's (it's free!)

Kohl's narrative projects $14.0 billion revenue and $157.0 million earnings by 2028. This requires a 4.5% annual revenue decline and a $36 million increase in earnings from the current $121.0 million.

Uncover how Kohl's forecasts yield a $14.28 fair value, a 11% downside to its current price.

Exploring Other Perspectives

Five Simply Wall St Community fair value estimates for Kohl's range from US$14.28 to US$59.96 per share. With many contributors and industry data suggesting sales headwinds, opinions about the company's outlook and value can differ widely, review a variety of perspectives to inform your own view.

Explore 5 other fair value estimates on Kohl's - why the stock might be worth over 3x more than the current price!

Build Your Own Kohl's Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Kohl's research is our analysis highlighting 3 key rewards and 4 important warning signs that could impact your investment decision.
• Our free Kohl's research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Kohl's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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