Marketdash
Back to News

Kohl's Surprises Wall Street With Strong Quarter as Analysts Lift Forecasts

MarketDash Editorial Team
11 days ago
Telsey Advisory raises price target to $23 after Kohl's delivers consecutive beats and shows momentum in its omnichannel turnaround strategy heading into the holiday season.

Kohl's Corporation (KSS) shares climbed Wednesday after analysts at UBS and Telsey Advisory boosted their price targets following an earnings report that exceeded expectations by a comfortable margin.

The Numbers Tell a Story

On Tuesday, Kohl's reported third-quarter adjusted earnings of 10 cents per share. That might not sound impressive until you realize analysts were expecting a loss of 20 cents. That's a 30-cent beat, which in retail land counts as a pleasant surprise.

Revenue came in at $3.41 billion, topping the Street's $3.32 billion estimate. More importantly, the company raised its full-year adjusted EPS guidance to $1.25–$1.45, up from the previous range of 50–80 cents. Analysts had been expecting just 71 cents, so this represents a meaningful upgrade. The company does anticipate net sales will decline between 3.5% and 4% for the year.

Management acknowledged the macroeconomic reality in their earnings call: the environment remains uncertain, and customers are being "increasingly choiceful" about where they spend, particularly among low-to-middle-income shoppers heading into the fourth quarter holiday season.

What Analysts Are Seeing

Telsey Advisory Group analyst Dana Telsey maintained a Market Perform rating but raised the price target from $16 to $23, pointing to stronger results and positive business momentum that's hard to ignore.

Telsey noted that Kohl's has now posted three consecutive quarters of beating on both revenue and earnings for fiscal 2025. Comparable sales, while still negative, improved 250 basis points sequentially and represented the strongest performance since the post-pandemic recovery in 2021.

There's also a leadership development worth noting: CEO Michael Bender, who had been serving as interim chief for six months, was named permanent CEO. That provides continuity at a time when the company is executing a recovery strategy focused on improved product mix, stronger value messaging, and a seamless omnichannel experience.

Telsey believes Kohl's can maintain this momentum with permanent leadership in place. While early signs look encouraging, the analyst acknowledged that regaining consumer trust takes time. The company's Sephora partnerships and store optimization efforts remain central to stabilizing performance amid ongoing industry challenges.

The analyst sees Kohl's as well-positioned to capture holiday demand, entering the crucial shopping season with better inventory management, stronger value assortments, expanded Sephora offerings, and broader promotions designed to drive traffic.

Telsey now projects fiscal 2025 net sales to decline 3.7% year-over-year to $14.81 billion, an improvement from the prior forecast of a 5.3% decline to $14.57 billion. The consensus estimate sits at $14.60 billion. For fiscal 2025, EPS is now expected at $1.42, up from the prior estimate of $0.67 and well above the consensus of $0.77. The fiscal 2026 EPS forecast was also raised to $1.46 from $0.79, compared to consensus of $0.70.

The Short Interest Dynamic

Here's an interesting wrinkle: Kohl's has a short float of 29.29 million shares, representing 36.75% of its publicly traded float. That's an exceptionally high level of short interest, meaning a lot of investors have been betting against the stock. When a heavily shorted stock delivers positive surprises, it can create additional upward pressure as shorts scramble to cover their positions.

As of Wednesday's trading session, Kohl's shares were up 6.07% at $23.78, hitting a new 52-week high. For a retailer that many had written off, that's quite the comeback story in progress.

Back to News

Kohl's Surprises Wall Street With Strong Quarter as Analysts Lift Forecasts

MarketDash Editorial Team
11 days ago
Telsey Advisory raises price target to $23 after Kohl's delivers consecutive beats and shows momentum in its omnichannel turnaround strategy heading into the holiday season.

Kohl's Corporation (KSS) shares climbed Wednesday after analysts at UBS and Telsey Advisory boosted their price targets following an earnings report that exceeded expectations by a comfortable margin.

The Numbers Tell a Story

On Tuesday, Kohl's reported third-quarter adjusted earnings of 10 cents per share. That might not sound impressive until you realize analysts were expecting a loss of 20 cents. That's a 30-cent beat, which in retail land counts as a pleasant surprise.

Revenue came in at $3.41 billion, topping the Street's $3.32 billion estimate. More importantly, the company raised its full-year adjusted EPS guidance to $1.25–$1.45, up from the previous range of 50–80 cents. Analysts had been expecting just 71 cents, so this represents a meaningful upgrade. The company does anticipate net sales will decline between 3.5% and 4% for the year.

Management acknowledged the macroeconomic reality in their earnings call: the environment remains uncertain, and customers are being "increasingly choiceful" about where they spend, particularly among low-to-middle-income shoppers heading into the fourth quarter holiday season.

What Analysts Are Seeing

Telsey Advisory Group analyst Dana Telsey maintained a Market Perform rating but raised the price target from $16 to $23, pointing to stronger results and positive business momentum that's hard to ignore.

Telsey noted that Kohl's has now posted three consecutive quarters of beating on both revenue and earnings for fiscal 2025. Comparable sales, while still negative, improved 250 basis points sequentially and represented the strongest performance since the post-pandemic recovery in 2021.

There's also a leadership development worth noting: CEO Michael Bender, who had been serving as interim chief for six months, was named permanent CEO. That provides continuity at a time when the company is executing a recovery strategy focused on improved product mix, stronger value messaging, and a seamless omnichannel experience.

Telsey believes Kohl's can maintain this momentum with permanent leadership in place. While early signs look encouraging, the analyst acknowledged that regaining consumer trust takes time. The company's Sephora partnerships and store optimization efforts remain central to stabilizing performance amid ongoing industry challenges.

The analyst sees Kohl's as well-positioned to capture holiday demand, entering the crucial shopping season with better inventory management, stronger value assortments, expanded Sephora offerings, and broader promotions designed to drive traffic.

Telsey now projects fiscal 2025 net sales to decline 3.7% year-over-year to $14.81 billion, an improvement from the prior forecast of a 5.3% decline to $14.57 billion. The consensus estimate sits at $14.60 billion. For fiscal 2025, EPS is now expected at $1.42, up from the prior estimate of $0.67 and well above the consensus of $0.77. The fiscal 2026 EPS forecast was also raised to $1.46 from $0.79, compared to consensus of $0.70.

The Short Interest Dynamic

Here's an interesting wrinkle: Kohl's has a short float of 29.29 million shares, representing 36.75% of its publicly traded float. That's an exceptionally high level of short interest, meaning a lot of investors have been betting against the stock. When a heavily shorted stock delivers positive surprises, it can create additional upward pressure as shorts scramble to cover their positions.

As of Wednesday's trading session, Kohl's shares were up 6.07% at $23.78, hitting a new 52-week high. For a retailer that many had written off, that's quite the comeback story in progress.

    Kohl's Surprises Wall Street With Strong Quarter as Analysts Lift Forecasts - MarketDash News