Kohl's (KSS) Up 4.4% Since Last Earnings Report: Can It Continue?

Core Insights - Kohl's reported Q2 fiscal 2025 adjusted EPS of 56 cents, exceeding the Zacks Consensus Estimate of 33 cents, but down from 59 cents in the prior year [2] - Total revenues for the quarter were $3,546 million, a 5% decline from $3,732 million in the previous year, yet above the consensus estimate of $3,476 million [3] - Comparable sales decreased by 4.2% year-over-year, slightly better than the expected decline of 5.6% [3] Financial Performance - Gross margin increased by 28 basis points to 39.9%, surpassing the anticipated increase of 20 basis points [4] - SG&A expenses fell by 4.1% to $1,199 million, but as a percentage of total revenues, they rose by 32 basis points to 33.8% [4] - Operating income rose to $279 million from $166 million in the previous year, with an operating income margin expansion of 343 basis points to 7.9% [5] Financial Health - At the end of the quarter, Kohl's had cash and cash equivalents of $174 million and shareholders' equity of $3,927 million [6] - Net cash provided by operating activities was $506 million for the six months ending August 2, 2025 [6] - The company declared a quarterly cash dividend of 12.50 cents per share, payable on September 24, 2025 [6] Future Outlook - For fiscal 2025, Kohl's anticipates a net sales decline of 5-6% and comparable sales to decrease by 4-5% [7] - The expected operating margin for fiscal 2025 is projected to be between 2.5% and 2.7% [7] - Full-year EPS is forecasted to be between 50 cents and 80 cents [7] Market Sentiment - Since the earnings release, there has been a flat trend in estimates revision, with a consensus estimate shift of 15.83% [8] - Kohl's holds a strong Growth Score of A and a similar score for momentum, along with a value score of A, placing it in the top 20% for value investors [9][10] - The company has a Zacks Rank 2 (Buy), indicating expectations for above-average returns in the coming months [11] Industry Comparison - Kohl's is part of the Zacks Retail - Regional Department Stores industry, where Dillard's has seen an 11.6% gain over the past month [12] - Dillard's reported revenues of $1.51 billion for the last quarter, reflecting a year-over-year increase of 1.6% [12] - Dillard's is expected to post earnings of $6.48 per share for the current quarter, indicating a 16.2% decline from the previous year [13]