Kohl's Reports Q1 Fiscal 2026 Results with Revenue Decline and Net Loss

Kohl's Corporation reported its financial results for the first quarter of fiscal 2026, revealing a total revenue of $3.167 billion, a decrease of 2% from $3.233 billion in the same period last year. Net sales fell by 1.7% to $2.998 billion, with comparable sales down 1.1%. The company's gross margin remained stable at 39.9% of net sales, reflecting a slight increase of 4 basis points year-over-year. Operating income decreased to $46 million from $60 million in the prior year, resulting in a net loss of $14 million, or $(0.13) per diluted share, consistent with the loss reported in the previous year.

In terms of operational metrics, Kohl's reported a decrease in customer transaction volume by approximately 4%, although the average transaction value increased by about 2%. Digital sales saw a 4% increase, contributing to 26% of total net sales, up from 24% in the first quarter of 2025. The company’s inventory levels decreased by 8% year-over-year to $2.9 billion. Additionally, Kohl's has maintained a strong liquidity position, with cash and cash equivalents rising to $429 million from $153 million a year earlier, and no borrowings under its $1.5 billion revolving credit facility.

Kohl's has made strategic moves to enhance its operational efficiency, including a reduction in selling, general, and administrative (SG&A) expenses, which fell by 1.6% to $1.145 billion. This decrease was primarily attributed to lower corporate costs. The company also reported a reduction in interest expenses, benefiting from a gain on extinguishment of debt related to open market repurchases of long-term debt. As of May 2, 2026, Kohl's had reduced its long-term debt by $50 million through these repurchases.

Looking ahead, Kohl's remains focused on its strategic initiatives aimed at driving long-term shareholder value. The company plans to invest approximately $350 to $400 million in capital expenditures throughout 2026, targeting enhancements in its omnichannel capabilities. The management has expressed optimism regarding potential refunds from previously paid tariffs, following a recent Supreme Court ruling, although the timing and amount of these refunds remain uncertain. Kohl's continues to navigate a challenging retail environment influenced by macroeconomic factors, including inflation and global trade policies, while striving to maintain a competitive edge in the market.