Kohl's $KSS rises 20% as Q1 comp sales mark best trend in four years

Kohl's $KSS rose 20% after Q1 FY2026 results showed a smaller comparable-sales decline and cleaner inventory. The company reported net sales of $3.0B for the quarter ended May 2, 2026, down 1.7% from a year earlier, while comparable sales decreased 1.1%.

The stock reaction was tied less to absolute growth than to trend improvement. Kohl's said the quarter represented its best comparable-sales performance in more than four years. Gross margin was 39.9%, up 4 basis points year over year, and SG&A expense fell 1.6% to $1.1B. Operating income was $46M, compared with $60M a year earlier.

The retailer reported a net loss of $14M, or $0.13 per diluted share, matching the prior-year per-share loss. Inventory was $2.9B, down 8% year over year. Operating cash flow was a use of $74M, while borrowings under the revolving credit facility were $0, down by $545M from a year earlier.

Management affirmed FY2026 guidance for net sales and comparable sales to range from a 2% decline to flat, adjusted operating margin of 2.8%-3.4%, adjusted diluted EPS of $1.00-$1.60, and capital expenditures of $350M-$400M. The board also declared a quarterly dividend of $0.125 per share, payable June 24, 2026.

The next test is whether traffic and conversion can keep the comparable-sales line near flat while the company protects inventory discipline and avoids margin pressure from promotions.

Not investment advice. Verify all figures with primary sources before acting.