Kohl's achieves increased net income despite sales contraction in 2025

US retail group Kohl’s Corporation has released its financial results for the fourth quarter and full fiscal year ended January 31, 2026, revealing a period of foundational resetting amid a challenging sales environment. For the full year 2025, net sales decreased 4 percent to 14.80 billion dollars, while comparable sales saw a contraction of 3.1 percent.

Despite softer topline performance, the company reported an increase in net income, which reached 272 million dollars, or 2.38 dollars per diluted share compared to 109 million dollars or 0.98 dollars per diluted share. Adjusted net income was 186 million dollars or 1.62 dollars per adjusted diluted share versus 167 million dollars and 1.50 dollars per adjusted diluted share, in the prior year.

Inventory management and debt reduction

Kohl’s chief executive officer, Michael J. Bender, stated that the company is ending the year in a stronger position than it started. “Over the past year, our efforts have been focused on resetting our foundation,” Bender said. He noted that the focus was intended to stabilize the business and strengthen operational ability for the future, despite the softer fourth quarter results.

Operational improvements drove a 7 percent reduction in year-end inventory, totaling 2.70 billion dollars. Financial stability also improved, with the company generating 1.40 billion dollars in operating cash flow and lowering long-term debt by 353 million dollars via the repayment of matured notes in July 2025.

Outlook for fiscal year 2026

Looking ahead to the fiscal year 2026, Kohl’s remains cautious. The company expects net sales and comparable sales to range from a 2 percent decrease to flat. Adjusted operating margin is projected to be between 2.8 percent and 3.4 percent, with adjusted diluted earnings per share (EPS) anticipated in the range of 1 dollar to 1.60 dollars.

The board of directors has declared a quarterly cash dividend of 0.125 dollars per share, payable on April 1, 2026.