Revenue Performance
Kohl’s Corporation reported a decline in top-line results for both the fourth quarter and the full fiscal year 2025. For the fourth quarter, net sales decreased 3.9% year-over-year, while comparable sales fell 2.8%. For the full fiscal year 2025, net sales declined 4.0% to $14.8 billion, accompanied by a 3.1% decrease in comparable sales. Despite the softer-than-expected top-line performance during the fourth quarter, management emphasized that the company maintained disciplined business management to stabilize operations and reset its foundation.
Profitability and Margins
Despite revenue contractions, the company achieved notable improvements in profitability and margin expansion. Full-year gross margin as a percentage of net sales increased by 34 basis points to 37.5%. Selling, general, and administrative expenses for the fiscal year decreased by 4.1% to $5.1 billion, representing 32.8% of total revenue. Operating income for the year reached $624 million, or 4.0% of total revenue, representing a 135 basis point increase year-over-year. Net income for the fourth quarter was $125 million, or $1.07 per diluted share, an increase from the $48 million, or $0.43 per diluted share, reported in the prior year period. For the full fiscal year, net income totaled $272 million, or $2.38 per diluted share. Full-year results also benefited from a $129 million gain from a credit card interchange fee lawsuit settlement.
Operational Highlights and Liquidity
The company significantly strengthened its balance sheet and liquidity position during fiscal 2025. Operating cash flow more than doubled to $1.4 billion, compared to $648 million in the prior year. Inventory levels were successfully reduced to $2.7 billion, representing a 7% year-over-year decrease. Additionally, the company eliminated its borrowings under the revolving credit facility, ending the period with a zero balance, which reflects a $290 million reduction from the prior year. The current portion of long-term debt was also reduced by $353 million following the maturity repayment of notes due in July 2025.