What Happened?
Shares of department store chain Kohl’s (NYSE: KSS) fell 4.6% in the afternoon session after worries lingered over declining sales and customer traffic. The retailer has been suffering from what reports call a "concerning pattern of customer behavior" that has negatively impacted sales for several quarters. In its second-quarter 2025 results, the company revealed a 4.2% year-over-year decrease in comparable sales. Reinforcing this trend, recent data indicated that Kohl's same-store customer visits also declined by 3.4% during the quarter. While the company did raise its full-year 2025 profit guidance in August, this positive news appears to be overshadowed by the simultaneous forecast of a 5% to 6% decline in annual sales, highlighting investor focus on the company's struggle to achieve top-line growth.
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What Is The Market Telling Us
Kohl’s shares are extremely volatile and have had 46 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 7 days ago when the stock gained 20% on the news that the company reported better-than-expected second-quarter earnings and significantly raised its annual profit forecast, signaling that its turnaround efforts may be gaining traction. Kohl's posted adjusted earnings of $0.56 per share for the quarter, an 88.6% beat over analyst expectations. This strong bottom-line performance came despite revenue falling 5% year on year to $3.55 billion and same-store sales declining 4.2%. The results suggest that the company's cost-cutting measures are successfully improving profitability, as its operating margin expanded to 7.9% from 4.4% in the same quarter last year. Looking ahead, the company boosted its full-year adjusted earnings guidance to a range of $0.50 to $0.80 per share, a substantial increase from its prior forecast of $0.10 to $0.60.
Kohl's is up 10.9% since the beginning of the year, but at $15.56 per share, it is still trading 26.3% below its 52-week high of $21.10 from September 2024. Investors who bought $1,000 worth of Kohl’s shares 5 years ago would now be looking at an investment worth $716.16.
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