Kohl's (KSS) continues to lose market share to other retail channels, particularly off-price retailers, as weak sales and fixed-cost deleverage pressure earnings, UBS Securities said.
The investment firm said in a Wednesday note that it expects consensus EPS estimates to move lower over the next year and sentiment to remain muted.
Kohl's comparable sales declined 0.9% in Q2, compared with growth of 1% at Marmaxx, 7% at HomeGoods and 10% at Ross Stores, suggesting continued share losses despite sequential improvement in sales trends, according to the research note.
Proprietary brand sales growth slowed to 3% from 6% in Q1, while Sephora sales declined 4% in Q2. UBS said limited near-term visibility at Sephora remains a drag.
UBS raised its 2026 EPS estimate to $2.15 from $1.35, largely reflecting one-time tariff refunds and other benefits, while leaving fiscal 2027 and 2028 estimates unchanged.
UBS maintained its sell rating and a $9 price target on the stock.
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