Kohl’s Co. announced that its second‑quarter 2026 sales fell short of analysts’ expectations, highlighting a broader shift among American shoppers toward more selective spending on non‑essential items. The department‑store chain posted revenue of $3.32 billion, a 0.9% drop from a year earlier, compared with the consensus estimate of a modest 0.1% decline to $3.35 billion.
Consumer sentiment drives cautious buying
U.S. consumer confidence weakened in August, and retail sales contracted in July—the first decline in nine months. The trend reflects tighter household budgets among middle‑ and lower‑income families, who are scaling back purchases of apparel, home goods, and other discretionary products despite still‑strong spending by higher‑income households.
Competitive pressures intensify
Kohl’s continues to face stiff competition from off‑price retailers such as Ross Stores and TJX Companies, as well as the e‑commerce giant Amazon.com, which draws price‑sensitive shoppers with deep discounts and convenient online options. These rivals have amplified the pressure on traditional department stores to adapt their value propositions.
Turnaround initiatives and financial outlook
Despite the sales miss, Kohl’s raised its full‑year profit outlook after receiving $150 million in tariff refunds during the quarter. The company also announced the resumption of its roughly $100 million share‑repurchase program later this year.
Margin performance showed improvement, with gross margin expanding 305 basis points year‑over‑year to 43%, helped in part by the tariff refunds. Kohl’s is pursuing a long‑term turnaround strategy that emphasizes value‑oriented shoppers, including expanded private‑label brands and a greater number of coupon‑eligible items.
Future earnings guidance
The retailer now projects adjusted earnings for fiscal 2026 of $1.80 to $2.40 per share, up from its prior range of $1.00 to $1.60. Net‑sales growth is expected to be flat to a decline of up to 1.5%, a modest adjustment from the earlier outlook of flat growth to a 2% decline.
Analysts will watch how Kohl’s continues to balance its turnaround investments with the evolving spending habits of American families, especially as inflation remains a concern for many households.
Original reporting: Appleton, WI News Feed (HLL/CB) — read the source article.
