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(Sharecast News) - Kohl's shares rose on Thursday after the department store chain posted a smaller-than-expected first-quarter loss and reaffirmed its full-year guidance, as early signs of progress emerged under chief executive Michael Bender's turnaround plan.
Net sales fell 1.7% year on year to $3.0bn in the 13 weeks ended 2 May, slightly ahead of the $2.99bn expected by analysts in an LSEG survey cited by CNBC.
Comparable sales declined 1.1%, an improvement from the 2.8% fall reported in the previous quarter and the company's best comparable sales performance in more than four years.
Kohl's reported a net loss of $14m, or 13cents per share, compared with a loss of $15m, or 13cents per share, a year earlier.
Analysts had expected a loss of 19cents per share, according to LSEG estimates cited by CNBC and Reuters.
Bender said: "We are pleased with our start to 2026.
"Our key initiatives continue to drive progressive improvements to the business, resulting in our best comparable sales performance in over four years.
"In addition, we continue to manage the business with great discipline leading to strong expense management, cleaner inventories, and an improved balance sheet."
Gross margin was broadly flat at 39.9%, up four basis points year on year.
Selling, general and administrative expenses fell 1.6% to $1.1bn, though they rose slightly as a proportion of total revenue to 36.2%.
Operating income declined to $46m from $60m, with operating margin down 41 basis points to 1.4%.
Inventories fell 8% year on year to $2.9bn, reflecting efforts to simplify the assortment and improve stock discipline.
Kohl's also ended the quarter with no borrowings under its revolving credit facility, compared with $545m a year earlier, while cash and cash equivalents rose to $429m from $153m.
The retailer had been trying to reverse years of declining sales and market share losses to Amazon, off-price retailers and other competitors.
Reuters said Bender, who was named permanent CEO in November, had focused on cutting unproductive styles, improving basics, reviving categories such as jewellery and accessories, and expanding Kohl's Sephora partnership to attract younger shoppers.
Kohl's maintained its 2026 outlook, expecting net sales and comparable sales to range from a 2% decline to flat.
It said it continued to expect adjusted operating margin of 2.8% to 3.4%, adjusted diluted earnings per share of $1.00 to $1.60, and capital expenditure of $350m to $400m.
The company also declared a quarterly dividend of 12.5cents per share, payable on 24 June to shareholders of record as of 10 June.
At 0902 EDT (1402 BST), shares in Kohl's Corporation were up 17.6% in premarket trading in New York at $15.20.
Reporting by Josh White for Sharecast.com.