Kohl's Q4 Earnings Beat Estimates, Comparable Sales Dip 2.8% Y/Y

Core Insights - Kohl's Corporation (KSS) reported a fourth-quarter fiscal 2025 earnings per share (EPS) of $1.07, an increase from $0.95 in the previous year, surpassing the Zacks Consensus Estimate of $0.85. However, total revenues declined by 4.2% year over year to $5,173 million, missing the consensus estimate of $5,228 million [1][2][7]. Financial Performance - Total revenues for the quarter were $5,173 million, down from $5,397 million in the prior year, with net sales falling 3.9% to $4,972 million and other revenues decreasing by 9.5% to $201 million. Comparable sales dipped 2.8% year over year, primarily due to a decline in store transactions [2]. - Gross margin improved by 25 basis points to 33.1%, driven by effective inventory management, although this was partially offset by increased shipping costs. Digital sales penetration rose by 220 basis points to 35% of total sales [3][7]. - Selling, General and Administrative (SG&A) expenses decreased by 4.9% to $1,463 million, representing 28.3% of total revenues, a slight decrease from the previous year. Operating income rose to $212 million from $126 million, with an operating margin of 4.1%, reflecting a year-over-year increase of 176 basis points [4]. Financial Health - At the end of the quarter, Kohl's had cash and cash equivalents of $674 million and shareholders' equity of $4,048 million. For fiscal 2025, net cash provided by operating activities was $1,380 million, with expected capital expenditures for fiscal 2026 projected between $350 million and $400 million [5]. Future Outlook - For fiscal 2026, Kohl's anticipates net sales and comparable sales to decline by 2% to flat, with an adjusted operating margin forecasted between 2.8% and 3.4%. Adjusted EPS is expected to range from $1.00 to $1.60 [6][7].