Kohl’s Corporation (NYSE: KSS) today reported results for the second quarter ended August 2, 2025.

• Net sales decreased 5.1% and comparable sales decreased 4.2%
• Gross margin increased 28 basis points
• Diluted earnings per share (“EPS”) of $1.35 and adjusted diluted EPS of $0.56 ^(a)
• Raises full year 2025 financial outlook

Michael Bender, Kohl’s Interim Chief Executive Officer, said “Kohl’s second quarter performance is a testament to the progress we are making against our 2025 initiatives. This resulted in sales performance that came in ahead of our expectations. While it is clear that these initiatives are beginning to resonate with our customers, our team remains focused on delivering progressive improvement throughout the remainder of the year against a challenging economic backdrop.

In addition to our top line progress, we managed the business with great discipline in the quarter. We were able to expand our gross margins, reduce our inventory, and lower our expenses, leading to solid second quarter earnings. I continue to be impressed with our entire team at Kohl’s and am thankful for all their hard work,” Bender continued.

Second Quarter 2025 Results

Comparisons refer to the 13-week period ended August 2, 2025 versus the 13-week period ended August 3, 2024

• Net sales decreased 5.1% year-over-year, to $3.3 billion, with comparable sales down 4.2%.
• Gross margin as a percentage of net sales was 39.9%, an increase of 28 basis points.
• Selling, general & administrative (SG&A) expenses decreased 4.1% year-over-year, to $1.2 billion. As a percentage of total revenue, SG&A expenses were 33.8%, an increase of 32 basis points year-over-year.
• Gain on legal settlement was $129 million from a credit card interchange fee lawsuit settlement.
• Operating income was $279 million compared to $166 million in the prior year. As a percentage of total revenue, operating income was 7.9%, an increase of 343 basis points year-over-year. Adjusted operating income was $161 million compared to $166 million in the prior year. As a percentage of total revenue, adjusted operating income was 4.6%. ^(a)
• Net income was $153 million, or $1.35 per diluted share, and adjusted net income of $64 million, or $0.56 per adjusted diluted share. This compares to net income of $66 million, or $0.59 per diluted share, in the prior year. ^(a)
• Inventory was $3.0 billion, a decrease of 5% year-over-year.
• Operating cash flow was $598 million compared to $254 million in the prior year.
• Current portion of long-term debt was reduced by $353 million through repayment of the 4.25% notes due July 2025 at maturity.
• Borrowings under revolving credit facility were $75 million, a decrease of $335 million year-over-year.
• Long-term debt increased $347 million through issuance of $360 million of 10.000% senior secured notes due 2030.

Six Months Fiscal Year 2025 Results

Comparisons refer to the 26-week period ended August 2, 2025 versus the 26-week period ended August 3, 2024

• Net sales decreased 4.6% year-over-year, to $6.4 billion, with comparable sales down 4.0%.
• Gross margin as a percentage of net sales was 39.9%, an increase of 33 basis points.
• Selling, general & administrative (SG&A) expenses decreased 4.7% year-over-year, to $2.4 billion. As a percentage of total revenue, SG&A expenses were 34.9%, an increase of 2 basis points year-over-year.
• Gain on legal settlement was $129 million from a credit card interchange fee lawsuit settlement.
• Operating income was $339 million compared to $209 million in the prior year. As a percentage of total revenue, operating income was 5.0%, an increase of 207 basis points year-over-year. Adjusted operating income was $221 million compared to $209 million in the prior year. As a percentage of total revenue, adjusted operating income was 3.3%. ^(a)
• Net income was $139 million, or $1.23 per diluted share, and adjusted net income of $50 million, or $0.44 per adjusted diluted share. This compares to net income of $39 million, or $0.35 per diluted share, in the prior year. ^(a)
• Operating cash flow was $506 million compared to $247 million in the prior year.
• Current portion of long-term debt was reduced by $353 million through repayment of the 4.25% notes due July 2025 at maturity.
• Borrowings under revolving credit facility were $75 million, a decrease of $335 million year-over-year.
• Long-term debt increased $347 million due to issuance of $360 million of 10.000% senior secured notes due 2030.

2025 Financial and Capital Allocation Outlook

For the full year 2025, the Company currently expects the following, excluding the impact of items not representative of our core operating performance:

• Net sales: A decrease of (5%) to a decrease of (6%)
• Comparable sales: A decrease of (4%) to a decrease of (5%)
• Adjusted operating margin: In the range of 2.5% to 2.7% ^(a)
• Adjusted diluted EPS: In the range of $0.50 to $0.80 ^(a)
• Capital Expenditures: Approximately $400 million
• Dividend: On August 12, 2025, Kohl’s Board of Directors declared a quarterly cash dividend on the Company’s common stock of $0.125 per share. The dividend is payable September 24, 2025 to shareholders of record at the close of business on September 10, 2025.

Second Quarter 2025 Earnings Conference Call

Kohl’s will host its quarterly earnings conference call at 9:00 am ET on August 27, 2025. A webcast of the conference call and the related presentation materials will be available via the Company's web site at investors.kohls.com, both live and after the call.

Cautionary Statement Regarding Forward-Looking Information and Non-GAAP Measures

This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. The Company intends forward-looking terminology such as “believes,” “expects,” “may,” “will,” “should,” “anticipates,” “plans,” or similar expressions to identify forward-looking statements. Forward-looking statements include the information under “2025 Financial and Capital Allocation Outlook.” Such statements are subject to certain risks and uncertainties, which could cause the Company's actual results to differ materially from those anticipated by the forward-looking statements. These risks and uncertainties include, but are not limited to, risks described more fully in Item 1A in the Company’s Annual Report on Form 10-K and Item 1A of Part II of the Company’s Quarterly Report on Form 10-Q for the first quarter of fiscal 2025, which are expressly incorporated herein by reference, and other factors as may periodically be described in the Company’s filings with the SEC. Forward-looking statements relate to the date initially made, and the Company undertakes no obligation to update them.

This press release contains certain financial measures that are not prepared in accordance with generally accepted accounting principles (GAAP), including adjusted operating income, adjusted net income and adjusted diluted earnings per share. These non-GAAP financial measures are provided as additional insight into our operational performance and do not purport to be substitutes for, or superior to, operating income, net income, or diluted earnings per share as a measure of operating performance. We believe these adjusted measures are useful, as they are more representative of our core business, enhance comparability across reporting periods and to industry peers, and align with the measures used by management to evaluate the Company’s performance. We caution investors that non-GAAP measures should not be viewed in isolation and should be evaluated in addition to, and not as an alternative for, our results reported in accordance with GAAP. Because companies may use different calculation methods, these measures may not be comparable to other similarly titled measures reported by other companies. A reconciliation of each non-GAAP measure to the most directly comparable GAAP measure is included in this release.

About Kohl's

Kohl’s (NYSE: KSS) is a leading omnichannel retailer built on a foundation that combines great brands, incredible value and convenience for our customers. Kohl’s is uniquely positioned to deliver against its long-term strategy and its purpose to take care of families’ realest moments. Kohl's serves millions of families in its more than 1,100 stores in 49 states, online at Kohls.com, and through the Kohl's App. With a large national footprint, Kohl’s is committed to making a positive impact in the communities it serves. For a list of store locations or to shop online, visit Kohls.com. For more information about Kohl’s impact in the community or how to join our winning team, visit Corporate.Kohls.com.

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