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Kohl's Continues to Expect Subdued Full-Year Sales Amid Macro Pressures

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Kohl's Continues to Expect Subdued Full-Year Sales Amid Macro Pressures

Kohl's (KSS) continues to expect subdued sales this year amid a difficult operating environment, even though it raised earnings guidance due to tariff refunds.

The department store chain expects fiscal 2026 net and comparable sales to be flat to down 1.5% year over year, improving the bottom end from its previous forecast that called for a 2% drop. Analysts expect a 0.3% drop in same store sales this year.

"We are operating in a challenging macroeconomic environment where our customers are experiencing persistent financial pressures from inflation in their everyday expenses like gas and food, while their day-to-day priorities may change," Chief Executive Michael Bender said during an earnings call, according to a FactSet transcript. "And as we look to the remainder of the year, we expect this economic backdrop to continue."

Full-year adjusted earnings are now expected between $1.80 and $2.40 per share, up from the prior $1 to $1.60 range. Analysts polled by FactSet expect $1.45.

The revised earnings guidance includes a tariff refund benefit of about $0.65, Chief Financial Officer Jill Timm told analysts. The company received about $150 million in tariff refunds in the second quarter, giving Kohl's "even greater financial flexibility," she said.

Shares of the company were up 2.3% in Wednesday trade, and have fallen 11% this year.

For the second quarter ended Aug. 1, Kohl's adjusted EPS rose to $1.28 from $0.56 in the prior-year period, compared with the $0.58 consensus view. Net sales declined 0.9% annually to $3.318 billion, missing the average analyst estimate of $3.323 billion. Comparable sales also declined 0.9%, compared with analysts' view of a 0.6% drop.

Earlier in August, UBS Securities expected Kohl's to raise its full-year EPS guidance "slightly" due to strong second-quarter trends.

Macy's (M) raised its full-year outlook in June as the department store operator's fiscal first-quarter earnings unexpectedly increased on an annual basis. Off-price retailer TJX (TJX) raised its fiscal 2027 earnings outlook last week and held its comparable sales growth forecast steady.

Price: $18.02, Change: $+0.34, Percent Change: +1.89%

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