Kohl’s (KSS) investor relations material

Executive summary

• Q2 2026 net sales decreased 0.9% year-over-year to $3.3 billion, with comparable sales also down 0.9%, but gross margin improved by 305 basis points to 43.0% due to $150 million in tariff refunds and operational discipline.

• Digital sales grew 2.8% and represented 27% of net sales, while proprietary brands delivered 3% year-over-year growth.

• The company remains focused on value, quality, and a frictionless shopping experience, leveraging targeted promotions, expanded digital capabilities, and store enhancements.

• Inventory decreased 3% year-over-year to $2.9 billion, supporting trending categories and improving turnover.

• The company is restarting its share repurchase program and raised its full-year 2026 outlook.

Financial highlights

• Total revenue for Q2 was $3.515 billion, with operating income at $261 million (7.4% margin), and net income at $151 million ($1.28 EPS).

• Gross margin improved by 305 basis points to 43.0%, aided by $150 million in tariff refunds, with $100 million benefiting cost of goods sold.

• SG&A expenses declined 0.9% to $1.188 billion, flat at 33.8% of revenue; interest expense was $63 million.

• Cash and cash equivalents rose to $821 million from $174 million year-over-year.

• Debt reduced by $113 million year-to-date through open market repurchases.

Outlook and guidance

• Full-year 2026 net and comparable sales expected to decrease 1.5% to flat versus 2025.

• Adjusted operating margin projected at 3.5%–4.0%; adjusted EPS forecasted at $1.80–$2.40, including $0.65 from tariff refunds.

• Capital expenditures expected between $350 million and $400 million.

• Share repurchases of up to $100 million planned for 2026 under the existing $3 billion authorization.

• Board declared a quarterly dividend of $0.125 per share, payable September 23, 2026.