Kohl’s Corporation reported third‑quarter fiscal 2025 results that surpassed expectations, with revenue of $3.407 billion and adjusted earnings per share of $0.10, a $0.24 beat over the consensus estimate of a $0.18 loss. The company also lifted its full‑year adjusted EPS guidance to $1.25–$1.45 from the prior $0.50–$0.80 range, signaling renewed confidence in its turnaround plan.
Revenue fell 2.8% year‑over‑year to $3.407 billion, a decline that still exceeded analyst estimates of roughly $3.49 billion. The drop reflects broader retail softness, but the company’s mix shift toward higher‑margin proprietary brands and a 5% reduction in inventory helped cushion the impact. For comparison, Q3 FY2024 revenue was $3.5 billion and diluted EPS was $0.20.
Gross margin expanded to 39.6%, up 51 basis points from the prior quarter, driven by a stronger mix of private‑label apparel and accessories and disciplined inventory management that reduced markdowns. Operating income rose to $77 million, up from $73 million GAAP, as cost controls and digital sales growth offset the revenue decline. Digital sales grew 2.4% year‑over‑year, contributing to the margin lift.
Management raised the full‑year guidance in light of the improved margin trajectory and the momentum in its omnichannel strategy. CEO Michael J. Bender, who was appointed on November 23 2025, emphasized that the company is “moving in the right direction” and that disciplined execution will sustain profitability. The guidance increase reflects expectations of continued cost discipline and a gradual rebound in comparable sales.
Bender noted that the company remains focused on “quality products, great value, and a frictionless experience” amid an uncertain macroeconomic environment. He highlighted the importance of inventory discipline, the expansion of its Sephora partnership, and the growth of its private‑label brands as key drivers of the turnaround. The company also acknowledged ongoing headwinds from broader retail softness but underscored the resilience of its digital channel and margin expansion.
Investors reacted positively to the earnings beat and guidance lift, citing the strong margin expansion, disciplined cost management, and the company’s ability to generate cash flow despite a sales decline. The EPS beat and upward revision of full‑year guidance were identified as the primary catalysts for the favorable market response.
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