Kohl's Reports Fourth Quarter and Full Year Fiscal 2025 Financial Results

Key Terms

diluted earnings per share financial

Diluted earnings per share is a measure of a company's profit allocated to each share of stock, taking into account all possible shares that could be created through stock options, convertible bonds, or other securities. It shows the lowest possible earnings per share if all these potential shares were issued, helping investors understand the worst-case scenario for their ownership. This figure matters because it provides a more conservative view of a company's profitability per share.

comparable sales financial

"Comparable sales" are the total sales from stores or products that have been open for a certain period, usually the same time last year or last quarter. They help show whether a business is growing by comparing similar locations or products over time, much like checking if your favorite store's sales are going up compared to previous years.

gross margin financial

Gross margin is the difference between how much money a company makes from selling its products and how much it costs to produce them, expressed as a percentage of sales. It shows how efficiently a company is turning sales into profit before other expenses like marketing or salaries. Higher gross margin means the company keeps more money from each sale, which is a good sign of financial health.

selling, general & administrative (sg&a) expenses financial

Selling, general & administrative (SG&A) expenses are the everyday costs a company incurs to run its business that aren’t directly tied to making a product, such as sales and marketing, office rent, salaries for non-production staff, legal fees and utilities. Investors watch SG&A because it directly reduces profits and cash flow—like a household’s monthly bills—and rising or inefficient SG&A can signal poor cost control even if sales are growing.

operating income financial

Operating income is the profit a company earns from its regular business activities after subtracting the costs directly related to running the business, such as wages, rent, and supplies. It shows how well the core operations are performing, ignoring income or expenses from non-regular activities like investments or one-time events. Investors use it to assess the company's efficiency and profitability from its main work.

adjusted operating income financial

Adjusted operating income is a company's profit from its main activities, excluding certain one-time or unusual costs and gains. It helps investors see how well the business is performing in its normal operations, without distractions from rare events or expenses. This way, they get a clearer picture of the company’s true profitability.

non-gaap financial measures financial

Non-GAAP financial measures are numbers companies use to show their financial performance that exclude certain expenses or income. They help investors see how the company might perform without one-time costs or other unusual items, giving a different perspective from official reports. However, since they can be adjusted, they don’t always tell the full story and should be looked at alongside standard financial figures.

senior secured notes financial

Senior secured notes are loans a company sells to investors that are backed by specific assets and given first priority for repayment if the company defaults. Because they have a claim on collateral and are paid before other debts, they usually offer lower risk and correspondingly lower interest than unsecured debt; investors use them to judge how safe repayment and recovery of principal might be, like holding a mortgage instead of an unsecured credit card balance.

MENOMONEE FALLS, Wis.--(BUSINESS WIRE)-- Kohl’s Corporation [NYSE:KSS] (“Kohl’s” or the “Company”) today reported results for the quarter and year ended January 31, 2026.

• Fourth quarter net sales decreased 3.9% and comparable sales decreased 2.8%; fiscal year 2025 net sales decreased 4.0% and comparable sales decreased 3.1%.
• Fourth quarter diluted earnings per share (“EPS”) of $1.07
• Fiscal year 2025 diluted EPS of $2.38 and adjusted diluted EPS of $1.62 ^(a)
• Introduces fiscal year 2026 financial outlook

Michael J. Bender, Kohl’s Chief Executive Officer, said, “We are ending 2025 in a stronger position than we started, with important work still ahead of us. Over the past year, our efforts have been focused on resetting our foundation. This focus is intended to stabilize the business and strengthen our operational ability to build for a stronger future. In 2025, we made meaningful progress, despite our Q4 topline coming in softer than our expectations. We were able to manage the business with discipline, deliver improved earnings, and generate meaningful cash flow, all of which helped us strengthen our balance sheet.”

“In 2026, we are committed to further strengthening our foundation by addressing operational opportunities, building on our strengths, and modernizing our processes. We are confident that the work we are investing in now is essential for Kohl’s long-term benefit,” Bender continued.

Fourth Quarter 2025 Results
Comparisons refer to the 13-week period ended January 31, 2026 versus the 13-week period ended February 1, 2025

• Net sales decreased 3.9% year-over-year, to $5.0 billion, with comparable sales down 2.8%.
• Gross margin as a percentage of net sales was 33.1%, an increase of 25 basis points.
• Selling, general & administrative (SG&A) expenses decreased 4.9% year-over-year, to $1.5 billion. As a percentage of total revenue, SG&A expenses were 28.3%, a decrease of 23 basis points year-over-year.
• Operating income was $212 million compared to $126 million in the prior year. Adjusted operating income was $202 million in the prior year. As a percentage of total revenue, operating income was 4.1%, an increase of 176 basis points year-over-year and an increase of 35 basis points year over year compared to prior year adjusted operating income.^(a)
• Net income was $125 million, or $1.07 per diluted share, compared to net income of $48 million, or $0.43 per diluted share, and adjusted net income of $106 million, or $0.95 per adjusted diluted share, in the prior year. ^(a)
• Inventory was $2.7 billion, a decrease of 7% year-over-year.
• Cash flow provided by operating activities was $750 million compared to $596 million in the prior year.
• Borrowings under revolving credit facility were $0, a decrease of $290 million year-over-year.

Fiscal Year 2025 Results
Comparisons refer to the 52-week period ended January 31, 2026 versus the 52-week period ended February 1, 2025

• Net sales decreased 4.0% year-over-year, to $14.8 billion, with comparable sales down 3.1%.
• Gross margin as a percentage of net sales was 37.5%, an increase of 34 basis points.
• Selling, general & administrative (SG&A) expenses decreased 4.1% year-over-year, to $5.1 billion. As a percentage of total revenue, SG&A expenses were 32.8%, an increase of 5 basis points year-over-year.
• Gain on legal settlement was $129 million from a credit card interchange fee lawsuit settlement.
• Operating income was $624 million compared to $433 million in the prior year. As a percentage of total revenue, operating income was 4.0%, an increase of 135 basis points year-over-year. Adjusted operating income was $510 million compared to $509 million in the prior year. As a percentage of total revenue, adjusted operating income was 3.3%, an increase of 15 basis points year-over-year. ^(a)
• Net income was $272 million, or $2.38 per diluted share, and adjusted net income was $186 million, or $1.62 per adjusted diluted share. This compares to net income of $109 million, or $0.98 per diluted share and adjusted net income of $167 million and $1.50 per adjusted diluted share, in the prior year. ^(a)
• Cash flow provided by operating activities was $1.4 billion compared to $648 million in the prior year.
• Current portion of long-term debt was reduced by $353 million through repayment of the 4.25% notes due July 2025 at maturity.
• Long-term debt increased $262 million through issuance of $360 million of 10.000% senior secured notes due 2030, partially offset by open market repurchases of $87 million of our outstanding long-term debt.

(a)

Non-GAAP financial measures: Please see the “RECONCILIATION OF NON-GAAP FINANCIAL MEASURES” for a reconciliation of adjusted operating income to operating income, adjusted net income to net income, and adjusted diluted earnings per share to diluted earnings per share.

2026 Financial and Capital Allocation Outlook
For the full year 2026, the Company currently expects the following:

• Net sales and Comparable sales: A decrease of (2%) to flat
• Adjusted operating margin: In the range of 2.8% to 3.4% ^(b)
• Adjusted diluted EPS: In the range of $1.00 to $1.60 ^(b)
• Capital Expenditures: Approximately $350 to $400 million
• Dividend: On February 25, 2026, Kohl’s Board of Directors declared a quarterly cash dividend on the Company’s common stock of $0.125 per share. The dividend is payable April 1, 2026 to shareholders of record at the close of business on March 18, 2026.

(b)

Non-GAAP financial measures: The Company provides adjusted operating margin and adjusted diluted earnings per share on a non-GAAP basis and does not provide a reconciliation of the Company’s forward looking guidance to the most directly comparable GAAP financial measures because of the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliations.

 Fourth Quarter 2025 Earnings Conference Call

Kohl’s will host its quarterly earnings conference call at 9:00 am ET on March 10, 2026. A webcast of the conference call and the related presentation materials will be available via the Company's web site at investors.kohls.com, both live and after the call.

Cautionary Statement Regarding Forward-Looking Information and Non-GAAP Measures

This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. The Company intends forward-looking terminology such as “believes,” “expects,” “may,” “will,” “should,” “anticipates,” “plans,” or similar expressionsto identify forward-looking statements. Forward-looking statements include, but are not limited to, the information under “2026 Financial and Capital Allocation Outlook.” Such statements are subject to certain risks and uncertainties, which could cause the Company's actual results to differ materially from those anticipated by the forward-looking statements. These risks and uncertainties include, but are not limited to, risks described more fully in Item 1A in the Company’s Annual Report on Form 10-K and Item 1A of Part II of the Company’s Quarterly Report on Form 10-Q for the first quarter of fiscal 2025, which are expressly incorporated herein by reference, and other factors as may periodically be described in the Company’s filings with the SEC. Forward-looking statements relate to the date initially made, and the Company undertakes no obligation to update them.

This press release contains certain financial measures that are not prepared in accordance with generally accepted accounting principles (GAAP), including adjusted operating income, adjusted net income and adjusted diluted earnings per share. These non-GAAP financial measures are provided as additional insight into our operational performance and do not purport to be substitutes for, or superior to, operating income, net income, or diluted earnings per share as a measure of operating performance. We believe these adjusted measures are useful, as they are more representative of our core business, enhance comparability across reporting periods and to industry peers, and align with the measures used by management to evaluate the Company’s performance. We caution investors that non-GAAP measures should not be viewed in isolation and should be evaluated in addition to, and not as an alternative for, our results reported in accordance with GAAP. Because companies may use different calculation methods, these measures may not be comparable to other similarly titled measures reported by other companies. A reconciliation of each non-GAAP measure to the most directly comparable GAAP measure is included in this release.

About Kohl's

Kohl’s (NYSE: KSS) is a leading omnichannel retailer built on a foundation that combines great brands, incredible value and convenience for our customers. Kohl’s is uniquely positioned to deliver against its long-term strategy and its purpose to take care of families’ realest moments. Kohl's serves millions of families in its more than 1,100 stores in 49 states, online at Kohls.com, and through the Kohl's App. With a large national footprint, Kohl’s is committed to making a positive impact in the communities it serves. For a list of store locations or to shop online, visit Kohls.com. For more information about Kohl’s impact in the community or how to join our winning team, visit Corporate.Kohls.com.

KOHL’S CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

	Three Months Ended						Twelve Months Ended
(Dollars in Millions, Except per Share Data)	January 31, 2026			February 1, 2025			January 31, 2026			February 1, 2025
Net sales	$	4,972		$	5,175		$	14,775		$	15,385
Other revenue		201			222			752			836
Total revenue		5,173			5,397			15,527			16,221
Cost of merchandise sold		3,324			3,473			9,228			9,661
Gross margin rate		33.1	%		32.9	%		37.5	%		37.2	%
Operating expenses:
Selling, general, and administrative		1,463			1,539			5,089			5,308
As a percent of total revenue		28.3	%		28.5	%		32.8	%		32.7	%
Depreciation and amortization		174			183			700			743
Impairments, store closing, and other costs		—			76			15			76
(Gain) on legal settlement		—			—			(129	)		—
Operating income		212			126			624			433
Interest expense, net		59			74			288			319
Income before income taxes		153			52			336			114
Provision for income taxes		28			4			64			5
Net income	$	125		$	48		$	272		$	109
Average number of shares:
Basic		112			111			112			111
Diluted		117			112			114			112
Earnings per share:
Basic	$	1.11		$	0.43		$	2.43		$	0.98
Diluted	$	1.07		$	0.43		$	2.38		$	0.98

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(Unaudited)

	Operating Income			Net Income			Diluted Earnings per Share
(Dollars in Millions, Except per Share Data)
Three Months Ended January 31, 2026
GAAP	$	212		$	125		$	1.07
Impairments, store closing, and other costs		—			—			—
(Gain) on legal settlement		—			—			—
Income tax impact of items noted above		—			—			—
Adjusted (non-GAAP)	$	212		$	125		$	1.07
Three Months Ended February 1, 2025
GAAP	$	126		$	48		$	0.43
Impairments, store closing, and other costs		76			76			0.69
(Gain) on legal settlement		—			—			—
Income tax impact of items noted above		—			(18	)		(0.17	)
Adjusted (non-GAAP)	$	202		$	106		$	0.95
Twelve Months Ended January 31, 2026
GAAP	$	624		$	272		$	2.38
Impairments, store closing, and other costs		15			15			0.13
(Gain) on legal settlement		(129	)		(129	)		(1.13	)
Income tax impact of items noted above		—			28			0.24
Adjusted (non-GAAP)	$	510		$	186		$	1.62
Twelve Months Ended February 1, 2025
GAAP	$	433		$	109		$	0.98
Impairments, store closing, and other costs		76			76			0.69
(Gain) on legal settlement		—			—			—
Income tax impact of items noted above		—			(18	)		(0.17	)
Adjusted (non-GAAP)	$	509		$	167		$	1.50

KOHL’S CORPORATION
CONSOLIDATED BALANCE SHEETS

(Dollars in Millions)	January 31, 2026		February 1, 2025
Assets	(Unaudited)		(Audited)
Current assets:
Cash and cash equivalents	$	674	$	134
Merchandise inventories		2,745		2,945
Other		272		309
Total current assets		3,691		3,388
Property and equipment, net		6,914		7,297
Operating leases		2,338		2,394
Other assets		419		480
Total assets	$	13,362	$	13,559
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable	$	1,171	$	1,042
Accrued liabilities		1,181		1,263
Borrowings under revolving credit facility		—		290
Current portion of:
Long-term debt		—		353
Finance leases and financing obligations		85		81
Operating leases		94		102
Total current liabilities		2,531		3,131
Long-term debt		1,436		1,174
Finance leases and financing obligations		2,365		2,456
Operating leases		2,650		2,703
Deferred income taxes		91		28
Other long-term liabilities		241		265
Shareholders’ equity:		4,048		3,802
Total liabilities and shareholders’ equity	$	13,362	$	13,559

KOHL’S CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

	Twelve Months Ended
(Dollars in Millions)	January 31, 2026			February 1, 2025
Operating activities
Net income	$	272		$	109
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		700			743
Share-based compensation		34			30
Deferred income taxes		69			(85	)
Impairments, store closing, and other costs		11			36
Non-cash lease expense		87			89
Other non-cash items		(18	)		1
Changes in operating assets and liabilities:
Merchandise inventories		203			(60	)
Other current and long-term assets		91			(50	)
Accounts payable		130			(92	)
Accrued and other long-term liabilities		(103	)		20
Operating lease liabilities		(96	)		(93	)
Net cash provided by operating activities		1,380			648
Investing activities
Acquisition of property and equipment		(372	)		(466	)
Proceeds from sale of property and equipment		54			6
Other		(15	)		(7	)
Net cash used in investing activities		(333	)		(467	)
Financing activities
Proceeds from issuance of debt, net of discount		357			—
Deferred financing costs		(11	)		—
Net (repayments) borrowings under revolving credit facility		(290	)		198
Shares withheld for taxes on vested restricted shares		(5	)		(10	)
Dividends paid		(56	)		(222	)
Repayment of long-term borrowings		(440	)		(113	)
Discount (premium paid) on redemption of debt		11			(5	)
Finance lease and financing obligation payments		(83	)		(79	)
Proceeds from financing obligations		10			1
Net cash used in financing activities		(507	)		(230	)
Net increase (decrease) in cash and cash equivalents		540			(49	)
Cash and cash equivalents at beginning of period		134			183
Cash and cash equivalents at end of period	$	674		$	134

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20260310006820/en/

Investor Relations:

Trevor Novotny, (262) 703-1617, trevor.novotny@kohls.com

Media:

Jen Johnson, (262) 703-5241, jen.johnson@kohls.com

Source: Kohl’s