Kohl's Q1 Earnings Signal Sales Momentum

Kohl's Q1 earnings showed improving comparable sales and affirmed full-year 2026 guidance, directing investors to margin resilience and capital allocation.

May 28, 2026·2 min read
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Flat filled vector of a single retail storefront icon representing Kohl's Q1 earnings momentum on a light amber gradient.

KEY TAKEAWAYS

  • Reported best comparable-sales performance in four years despite a 1.1% year-over-year comps decline.
  • Net loss narrowed to $14 million while operating income was $46 million.
  • Management affirmed full-year 2026 guidance and kept capex and dividend plans intact.

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Kohl’s Corporation (NYSE: KSS) reported first-quarter results for the three months ended May 2, 2026, showing improving sales trends and operational progress that keep its turnaround plan in focus. Management affirmed full-year 2026 guidance despite lower year-over-year sales.

Q1 Results and Sales Trends

Kohl’s reported total revenue of $3.2 billion for the quarter, with net sales declining 1.7% year over year. Comparable sales, or same-store sales, fell 1.1%, which management described as the company’s best comparable-sales performance in four years. This marked a sequential improvement from a 2.8% decline in the prior quarter.

The company posted a net loss of $14 million, or $0.13 per diluted share, and generated operating income of $46 million. Gross margin held steady at 39.9%, up four basis points year over year, while selling, general, and administrative (SG&A) expenses declined 1.6%, supporting the positive operating income.

Management called the quarter a solid start to 2026, citing product assortment, store productivity, and cost discipline as key drivers. CEO Michael Bender said, “Our key initiatives continue to drive progressive improvements to the business.”

Balance Sheet and Guidance

At quarter-end, Kohl’s held $429 million in cash and cash equivalents and $1.4 billion in long-term debt. The company reported rolling 12-month adjusted EBITDA of $1.2 billion. Free cash flow was negative $158 million, reflecting seasonal working capital needs. Kohl’s redeemed $50 million of debt during the quarter at a $9 million discount to par.

The company reaffirmed its full-year 2026 guidance, expecting net and comparable sales to be flat to down 2%, adjusted operating margin between 2.8% and 3.4%, and adjusted diluted earnings per share of $1.00 to $1.60. Capital expenditures are planned at $350 million to $400 million. Kohl’s targets an annual dividend of $0.50 per share and declared a quarterly dividend of $0.125 per share payable June 24, 2026. Management emphasized maintaining balance-sheet flexibility to pursue opportunistic debt reduction.

Investors have focused on the improving sales trajectory and the confirmation that the turnaround plan remains on track.

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