Kohl's FY 2026 Guidance Misses Estimates

Kohl's Corporation (NYSE: KSS) said in a press release on March 10, 2026, that its FY 2026 guidance points to weaker sales as budget-conscious shoppers reduce spending on apparel and home goods, a forecast that fell short of Wall Street's expectations.

Q4 and Full-Year 2025 Results

In the fourth quarter ended January 31, 2026, Kohl's reported net sales of $5.0 billion, down 3.9% year over year, with comparable sales declining 2.8%. Diluted earnings per share (EPS) were $1.07, beating the consensus of $0.85. Operating cash flow rose 26% to $750 million, reflecting margin gains and working-capital improvements that cushioned the softer top line.

Net income for the quarter was $125 million. Gross margin increased 25 basis points to 33.1%, selling, general, and administrative (SG&A) expenses fell 4.9% to $1.5 billion, and inventories declined 7% to $2.7 billion. The company attributed these trends to tighter cost control and inventory discipline during the holiday period.

For the full year 2025, Kohl's reported net sales of $14.8 billion, down 4.0% from the prior year, with comparable sales down 3.1%. Diluted EPS was $2.38, while adjusted diluted EPS rose to $1.62 from $1.50 the previous year. Operating cash flow climbed to $1.4 billion from $648 million in fiscal 2024. CEO Michael J. Bender said the company was "ending 2025 in a stronger position than we started, with important work still ahead of us."

FY 2026 Guidance and Dividend

Kohl's forecast FY 2026 net sales and comparable sales down 2% to flat. It projected adjusted diluted EPS between $1.00 and $1.60, with the midpoint of $1.30 below the Street consensus of $1.38. The company also forecast an adjusted operating margin of 2.8% to 3.4%. This guidance reflects a cautious near-term revenue outlook as customers trim purchases in higher-margin apparel and home categories.

The company declared a quarterly dividend of $0.125 per share, signaling a continued focus on shareholder returns despite the softer sales outlook. Management cited stronger cash generation in 2025 as supporting the payout. The narrower earnings range alongside the ongoing dividend suggests Kohl's is balancing cash returns against a revenue environment it views as weakening.

This guidance shortfall tightens the margin for error as Kohl's enters fiscal 2026 with the operational gains and cash flow improvements reported in 2025.