Kohl’s (KSS) Q1 2027 earnings summary

Executive summary

• Q1 2026 delivered the best comparable sales performance in over four years, with comparable sales down 1.1% year-over-year, driven by proprietary brands, digital growth, and disciplined expense management.

• Net sales declined 1.7% year-over-year to $3.0 billion, with gross margin improving by 4 basis points to 39.9%.

• Operating income was $46 million, down from $60 million in the prior year; net loss was $14 million, or $0.13 per diluted share.

• Inventory levels decreased 8% year-over-year to $2.9 billion, reflecting improved inventory management.

• Strategic initiatives focused on curated assortments, value leadership, and omnichannel enhancements are gaining traction.

Financial highlights

• Total revenue for Q1 2026 was $3.17 billion, down from $3.23 billion year-over-year; comparable sales declined 1.1%.

• Gross margin improved by 4 basis points to 39.9%, aided by higher proprietary brand penetration.

• SG&A expenses decreased by 1.6% to $1.1 billion, mainly from credit and corporate savings, but as a percent of revenue increased by 15 basis points to 36.2%.

• Net loss for the quarter was $14 million, or $0.13 per diluted share.

• Cash and cash equivalents at quarter-end were $429 million, up from $153 million a year ago.

Outlook and guidance

• FY2026 guidance reaffirmed: net sales and comparable sales expected between -2% and flat versus 2025.

• Operating margin projected at 2.8%-3.4%; adjusted diluted EPS guidance of $1.00-$1.60 per share.

• Capital expenditures planned at $350-$400 million for the year.

• Guidance excludes potential IEEPA tariff refunds; $140 million in claims submitted, $190 million eligible.

• Quarterly cash dividend of $0.125 per share declared, payable June 24, 2026.