Kohl’s tops earnings estimate and raises full year outlook, shares soar

Kohl’s shares are soaring again—and this time it’s not just a meme stock.

The department store chain’s shares surged on Wednesday as the company raised its full-year financial outlook and topped expectations despite a sales decline.

The company’s shares saw an uptick in mid-July as it caught the attention of the r/wallstreetbets Reddit thread, doubling the stock price and joining the meme stock rally that month. Following Wednesday’s earnings announcement, Kohl’s shares jumped by 27% in premarket trading and are up 17% at the time of publishing.

Kohl’s beat its quarterly earnings estimate, coming out at $0.56—in contrast to the Zacks Consensus Estimate of $0.33. Additionally, the company saw a slight uptick in revenue, coming out at $3.35 billion, compared with the $3.32 billion estimate by London Stock Exchange Group (LSEG) analysts.

Despite the favorable outlook, Kohl’s still saw a decrease in sales, with a 5.1% year-over-year decline.

“Our team remains focused on delivering progressive improvement throughout the remainder of the year against a challenging economic backdrop,” Kohl’s interim CEO Michael Bender said in the earnings report.

Getting back on their feet

The company’s solid quarter can be largely attributed to its turnaround efforts and major cost-cutting measures, including store closures and workforce reductions.

Earlier this year, the department store chain closed 27 stores across the country and saw a 10% reduction of its corporate workforce.

The company’s turnaround efforts include a reassessment of its assortment of products, as well as introducing more coupons for branded items.

“We were able to expand our gross margins, reduce our inventory, and lower our expenses, leading to solid second-quarter earnings,” Bender said.

Bender’s leadership followed the termination of former Kohl’s CEO Ashley Buchanan earlier this year. Buchanan, the company’s third CEO in three years, lasted four months on the job, stepping down due to involvement in an investigation surrounding vendor transactions with undisclosed conflicts of interest.

“Kohl’s second-quarter performance is a testament to the progress we are making against our 2025 initiatives,” Bender said. “This resulted in sales performance that came in ahead of our expectations.”