MW Can jewelry, kids' clothes and 'KPop Demon Hunters' resurrect Kohl's from the dead?

By Bill Peters

The department-store chain's stock is soaring after sales beat expectations - but it's still trading at a fraction of its record high

Kohl's reported first-quarter earnings on Thursday.

The past several years have been a mess for Kohl's.

The department-store chain's stock $(KSS)$ hit lows last year not seen since the 1990s, following leadership shake-ups and worries it wasn't selling enough of the cheaper store brands its consumers wanted. Even into this year, investors questioned the retailer's turnaround efforts, as sales kept falling.

And despite a recent bounce, the stock was still trading about 80% below its record close seen in August 2018.

Yet those concerns took a brief pause on Thursday, as gains in areas like jewelry, toys, women's apparel and baby gear helped Kohl's put up results that, while not very good, weren't as bad as expected - sending its stock toward its biggest gains in several months.

CEO Michael Bender on Thursday said there was still work to be done, as the company tries to keep apace with bigger retailers with more resources to compete on lower prices.

"While trends are encouraging, we are not satisfied with where we are," he said during Kohl's earnings call. "We need to continue to show up for our customers every day as they continue to put an importance on value and remain under financial pressure."

Bender said that demand among the chain's loyal credit-card consumers had improved. Same-store sales for its in-house private-label brands, which consumers depend on for cheaper alternatives, were up 6% during the first quarter.

Women's sportswear, as well as casual and office wear, helped drive those gains, as well as an expansion of its children's clothing to more stores. Kohl's also plans to install an extra 56 new Babies "R" Us shops within its stores during the fall. Parents often keep spending on their kids even when their own budgets are stretched, Bender noted.

The company is also expanding into different areas. Bender said Kohl's plans to launch new "KPop Demon Hunters" toys and push more novelty Lego sets.

Following a trial run, the retailer will also expand its fine-jewelry offerings - an area it has tried to reinvigorate in recent years - to 350 more locations. It will also introduce new fashion and hair-accessories lines under its SO private-label brand, which is geared toward women and girls.

Shares of Kohl's jumped over 20% in recent afternoon trading Thursday, to $15.53. The move higher put the stock on track for its biggest percentage gain since Nov. 25, when it surged 42.5%.

Kohl's shares have rallied more than 90% over the past 12 months. Still, the stock is well off its record close of $79.11 reached on Aug. 31, 2018. Its market capitalization of around $1.7 billion at current prices is a shadow of Macy's (M) market cap of $5.9 billion, Target's (TGT) $58.8 billion and Walmart's $(WMT)$ $940.7 billion.

In 2024, Jefferies analysts attributed Kohl's weakness to the company leaning too hard into more expensive nationally sold brands, which effectively raised prices for shoppers overall. Kohl's private-label brands, which are sold only in its stores, made up around a third of the company's sales, they noted at the time.

Placer.ai, a retail-traffic analytics firm, said in a report last week that visits to Kohl's in the first quarter fell 7.6% from a year ago. The firm said other department stores had seen similar trends, as higher gas prices due to the Iran war have hindered spending on things like shoes and clothes.

During the first quarter, Kohl's net sales slipped 1.7% year over year to $2.99 billion, but that result just beat Wall Street analysts' expectations. Same-store sales fell 1.1%, but that was better than expectations for a decline of 1.7%. The company lost $14 million, or 13 cents a share, compared with analysts' expectations for a loss of 19 cents per share.

Moreover, Kohl's outlook for the full year didn't get any worse despite deeper concerns about consumer spending, as recent data showed that consumer sentiment had dropped to the lowest levels seen in nearly 50 years. The company stuck with its full-year forecast for revenue and same-store sales growth to land within a range of flat to down 2%.

David Silverman, senior director at Fitch Ratings, said on Thursday that the results were a step in the right direction for Kohl's.

"While there remains a long road ahead for Kohl's to prove it can successfully stabilize market share, the company appears to be moving in the right direction with its mix of sales initiatives and efforts to control expenses and inventory," he said.

-Bill Peters

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May 28, 2026 13:40 ET (17:40 GMT)

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