Kohl's: Making progress

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Kohl's: Making progress

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Kohl's

Making progress

Maintain Rating: UNDERPERFORM | PO: 14.00 USD | Price: 15.59 USD

Better execution in 1Q, but guidance remains unchanged 29 May 2026

1Q showed progress in targeted areas of the business, but comps remain negative Equity

(-1.1%). The quarter reflected cleaner inventory, better owned brand traction, and a

stabilizing Kohl’s card customer, but stores comped down LSD and the F26 outlook was

Key Changesunchanged. The improvements are encouraging, but are not yet evidence of a growth

inflection. Given pressure on KSS’ core customer from higher fuel prices as tax refunds (US$) Previous Current

wane, we remain cautious on the durability of the turnaround and retain our Price Obj. 15.00 14.00

Underperform rating. We are maintaining our F26 EPS and raising our F27 estimates by 2027E Rev (m) 14,510.0 14,599.2

10% to reflect better credit performance from improving Kohl’s loyalty sales. We are 2028E Rev (m) 14,219.8 14,453.2

reducing our PO to $14 from $15, now based on a 12x F27E P/E, in line with peers (vs 2029E Rev (m) 13,935.4 14,164.2

4x F27E EV/EBITDA prior, as we standardize our valuation methodology to align with 2028E EPS 1.06 1.17

other retailers.) 2029E EPS 0.52 0.66

Made meaningful progress with core customer Lorraine Hutchinson, CFA

Research Analyst

We were most encouraged by the progress with the Kohl’s card customer, with comp BofAS

sales flat y/y, an improvement of 600bp vs. 4Q. That customer skews heavily towards +1 646 855 0951 lorraine.hutchinson@bofa.com

private brands, jewelry, and petites, which are the areas where Kohl’s has been Ryan Abbadi

reinvesting in after alienating that customer. Proprietary brands comped up 6%, led by Research Analyst

value, quality, and opening price points.