For the quarter ended 1 August 2026, Kohl’s net income reached $151m, or $1.28 per diluted share.
While this is slightly down from a reported GAAP net income of $153m in the prior-year period, it represents a massive surge over last year’s adjusted net income of $64m, or $0.56 per share.
Kohl’s attributed approximately $100m of the tariff refunds to gross margin gains, with the overall gross margin for the quarter rising by 305 basis points to 43.0%.
The company’s Q2 operating income came in at $261m. While down from the GAAP figure of $279m a year earlier, which was inflated by a one-time legal settlement, this represents a significant jump over last year’s operational baseline of $161m.
For the year to date, Kohl’s reported a 1.2% decline in net sales to $6.3bn, with comparable sales down 1.0%.
Net income slipped to $137m from $139m in the same period last year, while gross margin improved by 162 basis points to 41.5% of net sales.
Kohl’s acknowledged progress on its operational initiatives over the period but cautioned that “critical work” remained, as it continues to navigate a challenging sales environment.
Kohl’s CEO Michael Bender said: “We are confident that the work we are executing is leading us in the right direction. Our second quarter results reflect the ongoing progress against our initiatives, leading to another improvement in our comparable sales trend. While we are encouraged with the momentum we have made thus far, we know there is critical work ahead of us.
“Importantly, we have made significant strides in building a strong balance sheet through diligent operational focus across the organisation. This provides us a critical foundation as we invest in the business, lead with value for our customers, and return capital to our shareholders.”
The financial boost from tariff refunds allowed Kohl’s to revise its fiscal 2026 (FY26) outlook upwards and restart its share repurchase programme, with up to $100m of shares set to be bought back under its existing $3bn authorisation.
The retailer now expects full-year comparable sales to range from a 1.5% decrease to flat and has raised its forecast for adjusted diluted earnings per share to between $1.80 and $2.40.
Adjusted operating margin is projected between 3.5% and 4.0%.
