# Kohl’s Corporation (KSS) Q2 2025 Financial Results Summary
On August 27, 2025, Kohl’s Corporation (NYSE: KSS) released its financial results for the second quarter ended August 2, 2025.
## Key Financial Highlights
– **Net Sales**: Decreased by **5.1%** year-over-year, totaling **$3.3 billion**, with comparable sales down **4.2%**.
– **Gross Margin**: Improved to **39.9%**, an increase of **28 basis points** compared to the same quarter last year.
– **Selling, General & Administrative (SG&A) Expenses**: Decreased by **4.1%**, amounting to **$1.2 billion**. As a percentage of total revenue, SG&A expenses were **33.8%**, which is an increase of **32 basis points** year-over-year.
– **Gain from Legal Settlement**: Recorded a gain of **$129 million** from a credit card interchange fee lawsuit.
– **Operating Income**: Increased to **$279 million** compared to **$166 million** in the prior year, representing **7.9%** of total revenue, up **343 basis points** year-over-year. Adjusted operating income was **$161 million**, relative to **$166 million** last year, or **4.6%** of total revenue.
– **Net Income**: Reached **$153 million**, or **$1.35 per diluted share**, and adjusted net income was **$64 million**, or **$0.56 per adjusted diluted share**. This is compared to a net income of **$66 million**, or **$0.59 per diluted share**, in the previous year.
– **Inventory**: Stood at **$3.0 billion**, marking a **5%** decline year-over-year.
– **Operating Cash Flow**: Improved significantly to **$598 million** from **$254 million** last year.
– **Current Portion of Long-Term Debt**: Reduced by **$353 million** through repayment of 4.25% notes due July 2025.
– **Revolving Credit Facility**: Borrowings decreased to **$75 million**, a decline of **$335 million** from the prior year.
– **Long-Term Debt**: Increased by **$347 million** due to the issuance of **$360 million** in 10.000% senior secured notes maturing in 2030.
## Six-Month Financial Performance
– **Net Sales**: Decreased by **4.6%** year-over-year to **$6.4 billion**, with comparable sales down **4.0%**.
– **Gross Margin**: Held steady at **39.9%**, reflecting an increase of **33 basis points**.
– **SG&A Expenses**: Totaled **$2.4 billion**, down **4.7%** year-over-year. SG&A as a percentage of total revenue was **34.9%**, up **2 basis points**.
– **Operating Income**: Increased to **$339 million**, compared to **$209 million** a year earlier, or **5.0%** of total revenue (+**207 basis points**).
– **Net Income**: Totaled **$139 million**, equivalent to **$1.23 per diluted share**, compared with **$39 million**, or **$0.35 per diluted share**, in the previous year.
## Future Outlook for 2025
– **Net Sales Expectation**: Anticipating a decrease of **5%** to **6%** for the full year.
– **Comparable Sales Projection**: Expected to decline between **4%** and **5%**.
– **Adjusted Operating Margin**: Forecasted to be in the range of **2.5%** to **2.7%**.
– **Adjusted Diluted EPS**: Projected to fall between **$0.50** and **$0.80**.
– **Capital Expenditures**: Expected to be approximately **$400 million**.
## Dividend Declaration
– On **August 12, 2025**, Kohl’s Board of Directors declared a quarterly cash dividend of **$0.125 per share**, which is payable on **September 24, 2025**, to shareholders of record as of **September 10, 2025**.
## Summary
Kohl’s reported a challenging second quarter but managed to expand its margins and improve cash flow while decreasing debt. The increase in operating income and net income along with the dividend declaration indicates a focused approach towards maintaining financial health amid a difficult retail climate. The company’s 2025 financial outlook suggests a cautious stance moving forward.
| Three Months Ended | Six Months Ended | |||
|---|---|---|---|---|
| August 2, 2025 | August 3, 2024 | August 2, 2025 | August 3, 2024 | |
| Net sales | $3,347 | $3,525 | $6,396 | $6,703 |
| Other revenue | 199 | 207 | 383 | 411 |
| Total revenue | $3,546 | $3,732 | $6,779 | $7,114 |
| Cost of merchandise sold | $2,011 | $2,128 | $3,845 | $4,051 |
| Gross margin rate | 39.9% | 39.6% | 39.9% | 39.6% |
| Operating expenses: | ||||
| Selling, general, and administrative | $1,199 | $1,250 | $2,363 | $2,478 |
| As a percent of total revenue | 33.8% | 33.5% | 34.9% | 34.8% |
| Depreciation and amortization | 175 | 188 | 350 | 376 |
| Impairments, store closing, and other costs | 11 | — | 11 | — |
| (Gain) on legal settlement | -129 | — | -129 | — |
| Operating income | $279 | $166 | $339 | $209 |
| Interest expense, net | 78 | 86 | 154 | 169 |
| Income before income taxes | $201 | $80 | $185 | $40 |
| Provision for income taxes | 48 | 14 | 46 | 1 |
| Net income | $153 | $66 | $139 | $39 |
| Average number of shares: | ||||
| Basic | 112 | 111 | 112 | 111 |
| Diluted | 114 | 112 | 113 | 112 |
| Earnings per share: | ||||
| Basic | $1.37 | $0.59 | $1.24 | $0.35 |
| Diluted | $1.35 | $0.59 | $1.23 | $0.35 |
| August 2, 2025 | August 3, 2024 | |
|---|---|---|
| Assets | ||
| Current assets: | ||
| Cash and cash equivalents | $174 | $231 |
| Merchandise inventories | $2,994 | $3,151 |
| Other | 306 | 331 |
| Total current assets | $3,474 | $3,713 |
| Property and equipment, net | $7,113 | $7,502 |
| Operating leases | $2,363 | $2,507 |
| Other assets | 441 | 458 |
| Total assets | $13,391 | $14,180 |
| Liabilities and Shareholders’ Equity | ||
| Current liabilities: | ||
| Accounts payable | $1,134 | $1,317 |
| Accrued liabilities | $1,159 | $1,185 |
| Borrowings under revolving credit facility | $75 | $410 |
| Current portion of: | ||
| Long-term debt | — | $353 |
| Finance leases and financing obligations | $84 | $81 |
| Operating leases | $96 | $92 |
| Total current liabilities | $2,548 | $3,438 |
| Long-term debt | $1,520 | $1,173 |
| Finance leases and financing obligations | $2,409 | $2,574 |
| Operating leases | $2,672 | $2,795 |
| Deferred income taxes | $54 | $95 |
| Other long-term liabilities | 261 | 275 |
| Shareholders’ equity | $3,927 | $3,830 |
| Total liabilities and shareholders’ equity | $13,391 | $14,180 |
