Kohl's Corporation (NYSE:KSS) is a well-known American department store retail chain. It offers a wide range of products, including clothing, footwear, bedding, furniture, jewelry, beauty products, electronics, and housewares. The company competes with other major retailers like Macy's and J.C. Penney. Recently, Jefferies maintained its "Hold" rating for Kohl's, with a stock price of $22.42 and a revised price target from $17 to $20.
Kohl's stock experienced a remarkable surge, climbing 43% to close at $22.42, its highest level since July 2024. This surge followed the company's announcement of a surprise profit and sales figures that exceeded expectations. Kohl's reported an adjusted profit of $0.10 per share, contrasting with the anticipated $0.16 loss per share projected by analysts. Revenue reached $3.58 billion, surpassing Wall Street's forecasts.
The stock's rally coincided with Michael Bender's confirmation as the permanent CEO, shedding his interim title. This is the second time this year that Kohl's shares have jumped approximately 40% in a single trading session. The previous surge in July was attributed to meme stock dynamics, occurring without significant news. The company's former CEO, Ashley Buchanan, had introduced a turnaround strategy focusing on key product categories.
Kohl's reported net sales of $3.58 billion for the quarter ending September 30, a 2.8% decline from the previous year but slightly surpassing analysts' predictions of $3.33 billion. Comparable sales saw a smaller decrease of 1.7%, compared to the anticipated 3.89% drop. The retailer's adjusted earnings per share were $0.10, outperforming the expected loss of $0.16. Net income was reported at $8 million, or $0.07 per diluted share.
Kohl's also saw an improvement in gross margins to 39.6%, a 5% reduction in inventory levels, and a significant increase in cash flow to $124 million, attributed to streamlined operations. CEO Michael Bender stated that these results demonstrate the progress being made on Kohl’s 2025 initiatives. The company raised its fiscal 2025 EPS guidance, contributing to the stock's upward movement, with high short interest potentially influencing the rise.
