Kohl’s (KSS) Q2 2026 earnings summary

Executive summary

• Q2 2025 net sales declined 5.1% year-over-year to $3.3 billion, with comparable sales down 4.2%, but results outperformed internal expectations and reflected progress on 2025 initiatives.

• Gross margin improved by 28 basis points to 39.9% in Q2, driven by proprietary brands and inventory management.

• Adjusted net income was $64 million and adjusted EPS was $0.56 for Q2; diluted EPS was $1.35, aided by a $129 million legal settlement gain.

• Inventory decreased 5% year-over-year to $3.0 billion.

• Strategic focus remains on curated assortments, value leadership, and omnichannel experience.

Financial highlights

• Total revenue for Q2 was $3.55 billion, down from $3.73 billion year-over-year.

• SG&A expenses decreased 4.1% to $1.2 billion in Q2, but as a percent of revenue, increased slightly.

• Operating income rose to $279 million from $166 million, aided by a $129 million legal settlement gain.

• Operating cash flow for the first half was $506 million, up from $247 million.

• Cash and cash equivalents at quarter-end: $174 million.

Outlook and guidance

• Full-year 2025 net sales expected to decrease 5% to 6%; comparable sales projected to decline 4% to 5%.

• Adjusted operating margin forecasted at 2.5% to 2.7%; adjusted diluted EPS expected in the range of $0.50 to $0.80.

• Capital expenditures planned at approximately $400 million; quarterly dividend of $0.125 per share declared.

• Inventory expected to end the year down mid-single digits.