Transformation showing initial results! Kohl's (KSS.US) Q1 performance exceeds expectations, comparable sales achieve best performance in four years.

Kohl's (KSS.US) announced better-than-expected performance for the first quarter of the 2026 fiscal year, indicating that the department store chain's transformation under CEO Michael Bender is beginning to show results. The financial report shows that Kohl's Q1 net sales were around $3 billion, a decrease of 1.7% year-on-year, slightly higher than the market's expected $2.99 billion; comparable sales decreased by 1.1%, lower than the market's expected 1.7% and lower than the 2.8% decrease in the fourth quarter of the 2025 fiscal year. Net loss was $14 million, compared to a net loss of $15 million in the same period last year; loss per share was $0.13, better than the market's expected loss per share of $0.19. Former Kohl's CEO Ashley Buchanan was previously fired for directing millions of dollars in business to individuals with whom he had undisclosed personal relationships, and Bender subsequently took over as CEO. Bender is trying to reverse the company's years of declining sales by focusing on private label brands and improving the in-store and online shopping experience. Bender stated, "We are pleased with the start of 2026. Our key initiatives continue to drive gradual business improvement, achieving the best comparable sales performance in over four years. In addition, we continue to manage the business with discipline to achieve strong expense control, healthier inventory levels, and an improved balance sheet." He mentioned that the company reduced borrowing under its revolving credit facility by $545 million, nearly tripling its cash and cash equivalents. Meanwhile, Kohl's reiterated its full-year performance guidance, expecting net sales and comparable sales to decrease between 2% and flat, with full-year net sales expected to be between $14.5 billion and $14.8 billion, with the midpoint of the forecast range at $14.65 billion below the market's expected $14.87 billion. The company also forecasts adjusted earnings per share for the full year to be between $1 and $1.60, with the midpoint of $1.30 below the market's expected $1.34. Due to continued sales decline and macroeconomic pressures, Kohl's stock has fallen by over 35% so far this year as of Wednesday's close. Kohl's Q1 revenue and profit both exceeded market expectations, while achieving the strongest comparable sales performance in four years, these positive factors were enough to offset its disappointing performance guidance. Boosted by this, as of the time of writing, Kohl's stock surged over 17% in pre-market trading on Thursday.