Profits spark at Kohl's despite slide in sales

(Sharecast News) - Kohl's Corporation said on Tuesday that it still had "important work" ahead of it, despite a rise in net income, after the US retailer saw sales slide over the crucial holiday period.

Fourth-quarter net sales at the New York-listed department store chain fell 3.9%, to $4.97bn, or by 2.8% on a comparable basis.

Kohl's said it had lost competitive ground during high-traffic shopping windows, including Black Friday, Cyber Monday and the week following Christmas.

"Customers are more value conscious and we need to better align our promotional statements to align to their needs and priorities," it noted.

However, ongoing turnaround efforts helped support net income despite weaker sales. The gross margin as a percentage of sales was 33.1%, an increase of 25 basis points, driven by strong inventory management, while selling, general administrative costs fell 4.9%. As a result, net income surged to $125m from $48m.

Over the year to 31 January 2026, net sales fell 4% to $14.78bn, or by 3.1% on a like-for-like basis, while net income more than doubled to $272m from $109m, boosted by lower costs and a one-off gain on a legal settlement.

Michael Bender, chief executive, said: "We are ending 2025 in a stronger position than we started, with important work still ahead of us.

"Over the past year, our efforts have been focused on resetting our foundation. This focus is intended to stabilise the business and strengthen our operational ability to build for a stronger future.

"In 2026, we are committed to further strengthening our foundation by addressing operational opportunities, building on our strengths and modernising our processes."

Net sales were forecast to come in between 2% lower and flat year-on-year in 2026, with adjusted diluted earnings per share in the range of $1.00 and $1.60.

The stock - which had fallen sharply in pre-market trading, shedding 9% - rallied after the bell, and by 1415 GMT had put on 12%.