Kohl’s Q2 Profit Surges on Tariff Refunds, Outpacing Prior-Year Adjusted Earnings Amid Slight Sales Dip

Kohl’s reported net income of $151 million, or $1.28 per diluted share, for the quarter ended August 1, 2026.

Although this fell slightly from the prior‑year GAAP net income of $153 million, it more than doubled last year’s adjusted net income of $64 million ($0.56 per share).

Kohl’s attributed roughly $100 million of the tariff refunds to higher gross margins, pushing the quarterly gross margin up 305 basis points to 43.0%.

Operating income came in at $261 million, down from $279 million a year ago (which included a one‑time legal settlement) but up sharply from the prior year’s operating baseline of $161 million.

For the year to date, net sales slipped 1.2% to $6.3 billion, with comparable sales down 1.0%.

Year‑to‑date net income edged down to $137 million from $139 million last year, while gross margin improved 162 basis points to 41.5% of net sales.

Kohl’s noted progress on operational initiatives but warned that further work is needed to navigate a challenging sales environment.

CEO Michael Bender said the company is building a stronger balance sheet, investing in the business, delivering value to customers, and returning capital to shareholders.

The one‑time tariff refund boost allowed Kohl’s to raise its fiscal 2026 outlook and resume a $100 million share‑buyback program under its existing $3 billion authorization.

Management now forecasts comparable sales to be flat to down 1.5% for the full year and projects adjusted diluted EPS of $1.80‑$2.40, with an adjusted operating margin of 3.5%‑4.0%.

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