Why Kohl's (KSS) Rose After Naming Michael J. Bender CEO and Raising Full-Year Outlook

• Earlier this week, Kohl’s Corporation announced Michael J. Bender as its permanent CEO and reported third-quarter earnings that exceeded market expectations, accompanied by a raised full-year outlook despite net sales and revenue declining to US$3.41 billion and US$3.58 billion, respectively.
• This leadership transition follows Bender’s tenure as interim CEO and comes amid ongoing efforts to drive operational improvements, inventory reductions, and renewed focus on proprietary brands, signaling an important shift in the company’s turnaround strategy.
• We’ll examine how Bender’s permanent appointment and Kohl’s improved financial guidance could alter the investment narrative and future assumptions.

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Kohl's Investment Narrative Recap

For shareholders, the investment thesis in Kohl’s centers on the company's ability to stabilize sales and defend margins amid sector headwinds, with operational shifts and proprietary brand initiatives offering a path to margin improvement. The recent CEO appointment and raised full-year outlook have helped improve short-term sentiment, but persistent declines in store transactions and macroeconomic pressures remain the biggest risks, while traffic recovery is still the main catalyst. Overall, the announcement is positive for the near-term catalyst but does not materially change the underlying structural challenge of waning foot traffic.

Among recent announcements, Kohl’s raised its 2025 earnings guidance as part of its third-quarter results, despite forecasting a continued decrease in net and comparable sales. This update directly relates to the near-term outlook and signals management’s confidence in ongoing efficiency efforts and inventory discipline, factors seen as key to offsetting the impact of shrinking store transactions and rising labor costs.

However, investors should be aware that despite renewed leadership and improved profit forecasts, persistent declines in in-store customer visits continue to challenge Kohl’s core business model and...

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

Kohl's narrative projects $15.2 billion in revenue and $199.4 million in earnings by 2028. This requires a 1.6% annual revenue decline and a $9.6 million decrease in earnings from the current $209.0 million.

Uncover how Kohl's forecasts yield a $15.61 fair value, a 37% downside to its current price.

Exploring Other Perspectives

Five fair value estimates from the Simply Wall St Community range widely, from US$14.72 to US$62.91. While some see deep value, ongoing store traffic declines highlight how opinions can diverge significantly on Kohl’s potential, consider multiple perspectives before making any conclusions.

Explore 5 other fair value estimates on Kohl's - why the stock might be worth 40% less 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 3 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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