Kohl’s reported signs of progress in its turnaround strategy during the first quarter, delivering its strongest comparable sales performance in more than four years alongside a smaller-than-expected loss.
The department store retailer said investments in its proprietary brands are helping drive momentum, with comparable sales for those labels rising 6% during the quarter.
Speaking on the company’s earnings call, CEO Michael Bender said Kohl’s own brands are connecting with shoppers seeking value-focused merchandise.
“National brands are still very important and always will be, and that is part of the formula here at Kohl’s is being able to offer, a rich national brand assortment along with, our proprietary brands,” Bender told analysts. “But particularly against the backdrop now of the economy that we are working through, our proprietary brand portfolio is really resonating with customers.”
He added: “We see that continuing going forward, and we think that is gonna be an important part of us to continue to focus on.”
Kohl’s has also been refining the in-store shopping experience by simplifying assortments and making products easier for customers to locate.
Related Story
The retailer, which operates more than 1,100 stores across 49 states, is also pursuing tariff-related refunds tied to Phase 1 China tariffs. CFO Jill Timm said Kohl’s has submitted $140 million in claims related to tariffs paid as the importer of record.
“The total tariff refunds we are eligible to receive is $190 million,” Timm said during the earnings call. “We did not receive any tariff refunds within the first quarter.”
For the quarter ended May 2, Kohl’s posted a net loss of $14 million, or $0.13 per share, compared with a loss of $15 million, or $0.13 per share, a year earlier. Analysts had expected a loss of $0.19 per share.
Operating income fell to $46 million from $60 million in the prior-year period, which the company attributed partly to debt repurchases and increased investment in proprietary brands.
Revenue declined 1.7% year over year to $3 billion, slightly ahead of analyst expectations. Digital sales rose 4%, supported by higher traffic and continued investment in online capabilities.
Comparable sales were down 1.1%, marking a significant improvement from the previous quarter’s 2.8% decline.
Inventory levels dropped 8% year over year to $2.9 billion, while selling, general and administrative expenses decreased 1.6% to $1.1 billion. SG&A expenses represented 36.2% of total revenue, up 15 basis points from the prior year.
“We are pleased with our start to 2026,” Bender said in the earnings release. “Our key initiatives continue to drive progressive improvements to the business, resulting in our best comparable sales performance in over four years.
“In addition, we continue to manage the business with great discipline leading to strong expense management, cleaner inventories, and an improved balance sheet.”
Kohl’s reaffirmed its full-year guidance, forecasting net sales and comparable sales ranging from down 2% to flat, alongside adjusted earnings per share between $1 and $1.60.
Click here to sign up to Retail Gazette‘s free daily email newsletter
