At a Glance:
- Kohl’s Q4 net sales declined 2.9% to $5.0 billion with comps down 2.8%
- CEO Michael Bender cited inventory depth and allocation issues and ineffective pricing during key shopping events
- The retailer lost pricing competitiveness during Black Friday, Cyber Monday and post-Christmas sales
- For 2026, Kohl’s plans to sharpen its pricing strategy, rebuild proprietary brands and strengthen inventory planning
MENOMONEE FALLS, Wis. – Kohl’s overall sales performance in the fourth quarter was hampered by two key factors.
Across the store, seasonal business lacked inventory depth, according to CEO Michael Bender. Allocation was also off, particularly at the retailer’s smaller-format stores. “Breakthrough pricing” during key shopping events also missed the mark, and Kohl’s lost a competitive edge during Black Friday, Cyber Monday and the week following Christmas.
“We consistently did not have the right product in the right place,” he told analysts during the company’s Q4 review call this morning.
In the home department, seasonal decor was too narrow and the assortment too limited. The offerings also lacked enough value. The lesson there, according to CFO Jill Timm: “Don’t go too deep on Santa Claus and snowmen.”
Top-line initiatives for 2026 include sharpening pricing, rebuilding proprietary brands, and shoring up their positioning as opening price leaders. Kohl’s also plans to bring more depth in inventory to key categories while simultaneously curating assortments to remove redundancy.
“In 2026, we are committed to further strengthening our foundation by addressing operational opportunities, building on our strengths, and modernizing our processes,” said Bender.
For the quarter ended Jan. 31, net sales declined 2.9% to $5.0 billion, with comps down 2.8%. Store comps declined in the mid single digits due to lower transactions. Kohl’s also experienced a drop in digital transactions.
Net income more than doubled, coming in at $125 million, or $1.07 per diluted share, compared to $48 million, or $0.43 per diluted share in the year-ago quarter.
For the full fiscal year, net sales were down 4.0% to $14.8 billion, with comps down 3.1%.
Net income jumped more than doubled to $272 million, or $2.38 per diluted share, compared to $109 million or $0.98 per diluted share in the prior fiscal year. Adjust net income was $186 million, or $2.38 per diluted share, compared to adjusted net income of $167 million, or $1.50 per diluted share in the prior year.
“Over the past year, our efforts have been focused on resetting our foundation,” said Bendor. “We were able to manage the business with discipline, deliver improved earnings, and generate meaningful cash flow, all of which helped us strengthen our balance sheet.”
Looking ahead, Kohl’s this morning issued its guidance for the new fiscal year. The company expects sales and comp to land in a range of a 2% decline to flat year over year. Adjusted operating margin is expected to be in the range of 2.8% to 3.4%.
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