Kohl’s(KSS) - 2026 Q2 - Quarterly Results

Financial Performance - Net sales for Q2 2025 decreased by 5.1% year-over-year to $3.3 billion, with comparable sales down 4.2%[5] - Gross margin increased by 28 basis points to 39.9% of net sales[6] - Diluted earnings per share (EPS) for Q2 2025 was $1.35, compared to $0.59 in the prior year[6] - Operating income rose to $279 million, an increase of 343 basis points year-over-year, with an operating margin of 7.9%[6] - Net income for the six months ended August 2, 2025, increased to $139 million, compared to $39 million for the same period in 2024, representing a significant growth[19] Cash Flow and Liquidity - Operating cash flow improved to $598 million, up from $254 million in the prior year[6] - Net cash provided by operating activities rose to $506 million, up from $247 million year-over-year[19] - Cash and cash equivalents at the end of the period were $174 million, down from $231 million at the end of the previous year[19] - The company experienced a net increase in cash and cash equivalents of $40 million during the period, compared to an increase of $48 million in the previous year[19] Inventory and Assets - Inventory decreased by 5% year-over-year to $3.0 billion[6] - Total current assets decreased to $3,474 million from $3,713 million, primarily due to a reduction in merchandise inventories[19] - Total assets decreased to $13,391 million from $14,180 million, reflecting a decline in both current and long-term assets[19] Liabilities and Debt - Total current liabilities decreased to $2,548 million from $3,438 million, driven by a reduction in accounts payable and borrowings under the revolving credit facility[19] - Long-term debt increased to $1,520 million from $1,173 million, indicating a rise in financial leverage[19] Capital Expenditures and Dividends - Capital expenditures for 2025 are estimated at approximately $400 million[11] - A quarterly cash dividend of $0.125 per share was declared, payable on September 24, 2025[11] - Dividends paid decreased significantly to $28 million from $111 million, reflecting a change in capital allocation strategy[19] Outlook - The company raised its full-year 2025 financial outlook, expecting net sales to decrease between 5% and 6%[11] - Adjusted diluted EPS guidance for the full year is projected to be in the range of $0.50 to $0.80[11]