Kohl's (KSS) Stock Forecast & Price Target

Kohl's has demonstrated strong digital sales growth, which increased by 2%, and a significant 30% year-over-year rise in impulse sales, indicating robust consumer engagement. The company's disciplined cost control is evident, as SG&A expenses improved to 35.3%, better than the consensus estimate, while gross margins expanded by 50 basis points to 39.6%, driven by favorable category mixes and enhanced own brand penetration. Additionally, improvements in sales performance among Kohl’s card customers and a notable rebound in men’s apparel indicate effective strategies to re-engage and capture growth from its core customer base.

Kohl's experienced a year-over-year operating margin contraction of 50 basis points to 2.2%, indicating significant pressure on its profitability compared to original estimates forecasting a more severe drop. The company anticipated a 4.0% decline in comparable store sales, reflecting a downward trajectory from last year's comp of -9.3%, underscoring weakness in consumer demand. Additionally, net sales fell 2.9% year-over-year, totaling $3.407 billion, coupled with a decrease in cash reserves, which declined to $144 million from $174 million year-over-year, highlighting potential liquidity concerns.