Kohl's (KSS) Stock Forecast & Price Target

Kohl's has experienced a significant increase in impulse sales, rising 30% year-over-year, indicating a robust consumer appetite and effective promotional strategies. Additionally, there are positive sales trends that have shown improvement throughout the quarter, reflecting a strengthening performance across the retail chain. Furthermore, the company benefits from increased penetration of proprietary brands, which leads to an enhancement in gross margins by 10-15 basis points for every 100 basis points achieved, underscoring the potential for higher profitability as brand loyalty grows.

Kohl's is experiencing a decline in its selling, general, and administrative expenses (SG&A), projected to fall between 4% and 4.5% year-over-year, which may indicate cost-cutting measures in response to financial pressures. Moreover, inventories are anticipated to decrease at a mid-single-digit (MSD) rate year-over-year by the end of fiscal year 2025, suggesting challenges in managing stock levels amid changing consumer demand. Finally, the performance in key product categories has been underwhelming, with men's and kids' apparel, as well as footwear, showing significant weaknesses, which could adversely affect overall sales and profitability.