Kohl’s Corporation (NYSE:KSS) shares fell in premarket trading on Tuesday after the retailer reported fourth-quarter earnings that exceeded expectations but delivered slightly weaker revenue and issued fiscal 2026 guidance below analyst forecasts. The stock dropped about 10%.
The company posted adjusted earnings per share of $1.07 for the fourth quarter, surpassing the analyst consensus estimate of $0.85 by $0.22. However, quarterly revenue totaled $5.0 billion, narrowly missing the $5.02 billion forecast and declining 3.9% from the same period a year earlier. Comparable sales for the quarter fell 2.8%.
Looking ahead to fiscal 2026, Kohl’s expects adjusted EPS between $1.00 and $1.60, with the midpoint of $1.30 coming in below the analyst consensus estimate of $1.38. The retailer also anticipates net sales and comparable sales to range from a 2% decline to flat performance for the year, with adjusted operating margins projected between 2.8% and 3.4%.
“We are ending 2025 in a stronger position than we started, with important work still ahead of us,” said CEO Michael J. Bender. “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.”
For the full fiscal year 2025, Kohl’s reported net sales of $14.8 billion, representing a 4.0% decline from the previous year, while comparable sales dropped 3.1%. Adjusted diluted earnings per share came in at $1.62, compared with $1.50 in fiscal 2024. Operating cash flow reached $1.4 billion, up significantly from $648 million in the prior year.
Gross margin improved by 25 basis points to 33.1% of net sales during the fourth quarter, while selling, general and administrative expenses fell 4.9% to $1.5 billion. Inventory levels also declined 7% year over year to $2.7 billion. The company also announced a quarterly dividend of $0.125 per share.