What Happened?
Shares of department store chain Kohl’s (NYSE: KSS) fell 4.5% in the afternoon session after the company was identified as an emerging 'meme stock' by JPMorgan.
The investment bank noted that Kohl's is seeing high levels of social media mentions and retail buying, alongside significant short interest from hedge funds. This creates a classic 'meme stock' scenario where retail investors and institutional short sellers are on opposite sides of the trade, often leading to sharp price swings. JPMorgan warned that such stocks 'may experience unexpected flows in case of increased activity.' Today's decline suggests that selling pressure is currently outweighing the buying from individual investors, highlighting the inherent volatility associated with this classification.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Kohl's? Access our full analysis report here, it’s free.
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 9 days ago when the stock dropped 4.6% on the news that 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.
Kohl's is up 9.6% since the beginning of the year, but at $15.38 per share, it is still trading 27.1% 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 $657.89.
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