KohlsNYSE: KSS

Kohl's (KSS) doesn't possess the right combination of the two key ingredients for a likely earnings beat in its upcoming report. Get prepared with the key expectations.

Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

Nike and Kohl's are still No. 1 choices among consumers for athletic footwear and department stores, according to a consumer sentiment study released by consulting firm AlixPartners.

Kohl's Corporation has revised its 2024 sales expectations downwards twice, with its current guidance 5% lower than its initial guidance. It has reduced its SG&A expectations by a couple of percent. As well, the credit card late fee regulatory changes have been delayed.

KSS's holiday season strategy is focused on delivering affordable gifts and an enhanced shopping experience with compelling value throughout the season.

MENOMONEE FALLS, Wis.--(BUSINESS WIRE)--Today, Kohl's (NYSE: KSS) unveils its plans for the holiday season to deliver more gifts at affordable prices, an inspiring shopping experience featuring new in-store curations, and value all season long, with new deals every week throughout November and December. “Kohl's understands how busy the holiday season is for families, so we're ready to help with everything they need to prepare and celebrate from decorating to gifting and hosting,” said Nick Jone.

Net sales fell 4.2% in the most recent quarter. Net earnings per share still increased 13.4%.

Kohl's share price has declined from $50 to $20 over the past three years due to a failed acquisition and a competitive retail environment. Short sellers have heavily targeted Kohl's in 2024, with short interest ballooning to 36% of diluted shares, betting on the negative effects of a consumer spending slowdown. If Kohl's beats lowered expectations in 2025, a massive short squeeze could propel the stock toward $40 quite easily. A 10% dividend and 30% FCF yield are also noteworthy.

I am upgrading Kohl's Corp. from sell to hold due to reduced downside risk. 2Q24 results showed an EPS beat driven by cost control, but SSS growth decelerated to -5.1%, indicating pressured consumer spending and weak core category performance. Sephora's strong SSS growth is unlikely to be sustained, making it difficult for KSS to meet FY24 SSS growth guidance amid a challenging macro environment.