Kohl's (KSS) Stock Forecast & Price Target

Kohl's demonstrated a solid performance with a 2% increase in digital sales and a significant 30% year-over-year growth in impulse sales last quarter, indicating strong customer engagement and demand for its product offerings. The company's disciplined cost control measures resulted in SG&A expenses at 35.3%, outperforming consensus estimates, while gross margin expansion to 39.6% was driven by favorable category mix and increased penetration of private-label brands. Additionally, a notable rebound in men's apparel and improvement in sales among Kohl’s card customers further underscores the retailer's effective strategy in re-engaging its core customer base and enhancing overall financial performance.

Kohl's has experienced a concerning contraction in its operating margin, which fell by 50 basis points year-over-year to 2.2%, indicating underlying profitability challenges. In addition, the company reported a total net sales decline of 2.9% to $3.407 billion, highlighting persistent weaknesses in both revenue generation and comparable store sales, which are expected to decrease by 4.0% year-over-year. Furthermore, Kohl's cash reserves were also depleted, dropping from $174 million to $144 million year-over-year, raising concerns about liquidity and financial stability moving forward.