Kohl's Well-Positioned To Capture Holiday Demand, Analyst Says

Core Viewpoint - Kohl's Corporation experienced a stock price increase following strong third-quarter earnings that exceeded analyst expectations, prompting analysts to raise their price forecasts [1][2]. Earnings Snapshot - The company reported third-quarter adjusted earnings per share of 10 cents, surpassing the analyst consensus estimate of a loss of 20 cents [2]. - Quarterly revenue reached $3.41 billion, exceeding the Street's estimate of $3.32 billion [2]. Guidance and Expectations - Kohl's raised its fiscal 2025 adjusted EPS guidance to $1.25–$1.45 from a previous range of 50–80 cents, compared to the consensus estimate of 71 cents [3]. - The company anticipates a net sales decline of 3.5% to 4% [3]. - Management expects the macroeconomic environment to remain uncertain, with consumers becoming more selective and value-driven, especially among low-to-middle-income groups during the holiday season [4]. Analyst Views - Telsey Advisory Group analyst Dana Telsey maintained a Market Perform rating and increased the price forecast from $16 to $23 due to stronger results and positive business momentum [5]. - The company achieved a third consecutive top- and bottom-line beat for fiscal 2025, with comparable sales improving by 250 basis points sequentially, marking the strongest performance since post-pandemic 2021 [5]. - CEO Michael Bender was named permanent CEO, which is expected to provide continuity and leadership for the company's recovery strategy [6]. Strategic Positioning - The company is well-positioned to capture holiday demand with improved inventory, stronger value assortments, expanded Sephora offerings, and broader promotions aimed at increasing traffic [7]. - Analysts project fiscal 2025 net sales to decline 3.7% year-over-year to $14.81 billion, an improvement from a previous estimate of a 5.3% decline [8]. - Fiscal 2025 EPS is now expected to be $1.42, up from $0.67, while fiscal 2026 EPS has been raised to $1.46 from $0.79 [8]. Market Sentiment - Kohl's has a short float of 29.29 million shares, representing 36.75% of its publicly traded float, indicating a high level of short interest from investors betting on further downside [9]. - At the time of publication, Kohl's shares were up 6.07% at $23.78, reaching a new 52-week high [9].