Kohl's (KSS) Stock Forecast & Price Target

Kohl's reported a 20 basis points expansion in gross margin to 33.1% due to effective inventory management and lower markdowns, despite challenges from higher shipping costs related to increased digital sales. The company ended the fourth quarter with a significant increase in cash and cash equivalents, rising to $674 million from $134 million year-over-year, underlining robust liquidity. Additionally, the expansion of operating margin by 40 basis points to 4.1% was driven by improved SG&A performance and reflects Kohl's consistent execution and strategic flexibility in managing its real estate and inventory.

Kohl's is facing significant financial challenges as it projects a year-over-year decline in earnings per share (EPS), forecasting FY26 EPS at $1.40 compared to $1.62 in FY25, indicative of ongoing sales contraction and margin pressures. The retailer's recent quarterly performance showed total sales and comparable sales declining sequentially, with fourth-quarter sales down 6.7% and third-quarter sales down 1.7%. Additionally, there was a notable drop in the Kohl’s card customer base, reflecting broader concerns about consumer engagement and spending at the retailer.