Kohl’s (KSS) Q3 2026 earnings summary

Executive summary

• Achieved third consecutive quarter of top- and bottom-line results ahead of expectations, reflecting progress on 2025 initiatives and improved customer engagement in a challenging macroeconomic environment.

• Net sales declined 2.8% year-over-year to $3.4 billion in Q3, with comparable sales down 1.7%.

• Gross margin improved by 51 basis points to 39.6% in Q3, driven by inventory management and proprietary brand mix.

• Michael J. Bender was appointed CEO, bringing stability and strategic focus after a period of transition.

• Focused on balanced assortment, value leadership, and frictionless omnichannel experience, while maintaining a healthy balance sheet and strong cash flow.

Financial highlights

• Q3 net sales declined 2.8% to $3.4 billion; year-to-date net sales fell 4% to $9.8 billion; comparable sales down 1.7% in Q3 and 3.2% YTD.

• Digital sales grew 2.4% year-over-year in Q3, with digital penetration at 28% of net sales.

• Gross margin for Q3 was 39.6%, up 51 bps YoY; YTD gross margin 39.8%, up 39 bps.

• SG&A expenses declined 2.1% to $1.3B in Q3; year-to-date SG&A down 3.8%.

• Adjusted net income was $11M in Q3 ($0.10 EPS); YTD adjusted net income $61M ($0.54 EPS).

• Operating cash flow YTD $630M, up from $52M last year; adjusted free cash flow $270M.

Outlook and guidance

• Full-year 2025 net sales expected to decline 3.5%-4%; comparable sales down 2.5%-3%.

• Adjusted operating margin guidance of 3.1%-3.2%; adjusted diluted EPS expected between $1.25 and $1.45.

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

• Inventory positioned well for holiday season, with earlier and better flow than last year.

• Plans to resume share repurchases over the long term as leverage improves.