Kohl's Raises Profit Outlook Amid Stagnant Sales Growth

Kohl's Corporation raised its full-year adjusted earnings per share forecast to between $1.80 and $2.40, up from a previous range of $1.00 to $1.60. The upgrade follows second-quarter results where adjusted earnings reached $1.28 per share, significantly beating analyst estimates of $0.57. This profit surge was largely driven by $150 million in one-time tariff refunds, which contributed to a gross margin increase of 305 basis points to 43%.

Despite the earnings beat, the company continues to struggle with organic growth. Net sales fell 0.9% in the second quarter, marking the 18th consecutive quarter of negative comparable sales. For the full year, the retailer forecasts that sales will remain little changed or decrease by as much as 1.5%.

Chief Executive Officer Michael J. Bender is leading a turnaround strategy focused on improving the customer shopping experience and expanding proprietary brands. To return value to shareholders, the company announced a quarterly dividend of $0.125 per share and the reinstatement of share repurchases with a $100 million target for the current year.

Market reaction was mixed to negative. Shares declined as much as 9% in premarket trading and remained down between 5% and 6% as investors focused on the lack of sales growth compared to competitors such as TJX Companies and Ross Stores.