Highlights

  • Kohl's shows 25.14% one-year basic EPS growth, a P/E of 10.55 and PEG of -0.81.
  • Second quarter net income was $151 million, or $1.28 per diluted share.
  • Gross margin was 43.0% of net sales; tariff refunds of approximately $150 million arrived.
  • Cash was $821 million, with no revolver borrowings and a $1.5 billion facility to 2031.

Basic earnings per share growth of 25.14% over one year, a trailing twelve-month P/E of 10.55 and a PEG of -0.81 on an expected basis define Kohl's (NYSE:KSS) as an undervalued growth stock, with shares trading at USD 23.48 on October 28, 2026, down 1.26%. In its latest disclosures, the omnichannel retailer extended the maturity of its revolving credit facility to June 30, 2031 through an amendment dated June 30, declared a quarterly dividend of $0.125 per share on August 18, and reported second quarter 2026 net income of $151 million on September 3.

Kohl's Corporation is headquartered in Menomonee Falls, Wisconsin, and is incorporated in Wisconsin. It operates as an omnichannel retailer with a single reportable segment, running 1,151 stores and a website as of August 1, 2026. The stores and website sell moderately priced proprietary and national brand apparel, footwear, accessories, beauty and home products. Net sales are reported for Women's, Accessories (including Sephora), Men's, Home, Children's and Footwear, and the company's most recent fiscal year ended January 31, 2026.

Growth: Second Quarter Earnings, Sales and Gross Margin

Net income was $151 million in the second quarter against $153 million a year earlier, and $137 million for the first half against $139 million. Basic earnings per share were $1.34 against $1.37 in the quarter and $1.22 against $1.24 for the half. Diluted earnings per share were $1.28 against $1.35 in the quarter and $1.18 against $1.23 for the half. The prior-year quarter included a $129 million gain on a legal settlement; the company reported prior-year adjusted non-GAAP net income of $64 million, or $0.56 per adjusted diluted share.

Net sales were $3,318 million against $3,347 million, a decrease of 0.9%, and comparable sales decreased 0.9%. Total revenue was $3,515 million against $3,546 million. Digital sales represented 27% of net sales. Home net sales rose 1.2%, while Footwear net sales fell 3.7%.

Gross margin was 43.0% of net sales against 39.9%, an increase of 305 basis points, which the company attributed to tariff refunds, partly offset by repayments to vendors and investments in value for customers. Selling, general, and administrative expenses were $1,188 million against $1,199 million, and operating income was $261 million against $279 million.

Valuation: P/E of 10.55, PEG of -0.81 and Balance Sheet Figures

The P/E ratio of 10.55 is measured on trailing twelve-month earnings, and the PEG ratio of -0.81 on an expected basis. Total shareholders' equity was $4,168 million at August 1, 2026, against $3,927 million a year earlier. Net cash provided by operating activities was $478 million for the first half against $506 million.

The company's capital allocation priorities are investing in the business, paying a quarterly dividend, reducing debt and leverage when appropriate, and returning excess cash through share repurchases.

Capital and Debt: Cash, Revolver, Notes and Dividend

Cash and cash equivalents were $821 million, against $174 million a year earlier, and included short-term investments of $682 million. Borrowings under the $1.5 billion revolving credit facility were $0, against $75 million, and an amendment in the second quarter extended its maturity by five years to June 30, 2031. Long-term debt was $1,325 million against $1,520 million. The company repurchased notes on the open market, reducing debt by $113 million year to date.

Dividends paid were $28 million, or $0.25 per share, in the first half. The $0.125 dividend declared August 18 was paid September 23, 2026. There were no treasury stock purchases in the first half. Under its $3 billion board authorization, of which approximately $2,476 million was available, the company said it is resuming its share repurchase program with plans to buy back approximately $100 million in stock in 2026.

Disclosed Risks and Outlook

Other revenue decreased $17 million in the first half, which the company attributed to lower credit card revenue from lower late fees and finance charges. The company disclosed that tariff changes, including Section 122 and replacement trade actions, may increase merchandise costs, affect availability and erode benefits from prior tariff recoveries. It paid approximately $190 million in IEEPA tariffs and submitted claims for approximately $185 million of refunds, with approximately $150 million received, of which approximately $100 million reduced cost of merchandise sold. The company said the timing, amount and receipt of further refunds are uncertain and that remaining claims are treated as gain contingencies.

The interest rate on the 3.375% notes due May 2031 has increased 175 basis points since issuance under a coupon adjustment provision that applies if long-term debt is downgraded. Kohl's said it is not party to any material legal proceedings.

The company anticipates capital expenditures of approximately $350 to $400 million in 2026.