Kohl’s Interim CEO Reports Q2 Profit Gains Amid Sales Decline

Kohl's reported better-than-expected second-quarter 2025 earnings driven by cost controls, margin improvements, and growth in proprietary brands and its Sephora partnership, despite a 5.1% decline in net sales and a 4.2% drop in comparable sales. Interim CEO Michael Bender, who took over after the abrupt departure of Ashley Buchanan, highlighted operational discipline, including a 5% inventory reduction and a 4.1% cut in SG&A expenses, as key to the improved results. Although earnings rose significantly compared to the prior year, Kohl's core lower- to middle-income customers remain financially pressured and are trading down to lower price-point products, prompting the company to focus on private-label brands and coupon-eligible offerings to regain loyalty. Analysts emphasize Kohl's need for a CEO with a long-term strategic vision, especially regarding real estate and adaptability to intense competition from retailers like Walmart and Target. Despite cautious optimism, risks remain due to the challenges of balancing cost-cutting with maintaining sales momentum, as lean inventories and staffing can negatively impact customer experience. Kohl's raised its 2025 earnings forecast while anticipating continued sales declines, reflecting both progress in its turnaround initiatives and ongoing macroeconomic headwinds.