How Kohl's Lost Its Way and Is Trying to Regain Relevance

• Kohl's peaked at $20.23 billion in revenue (fiscal year ending February 2019) but lost relevance by abandoning core strategies, removing key categories like petites and jewelry, and trying to become an off-price retailer instead of focusing on proprietary brands
• The company posted its best comparable sales growth in four years in its most recent quarter, with stock surging 20% after earnings, though full-year sales are still projected to be down 2% to flat
• Kohl's is trying to attract younger consumers through Sephora shop-in-shops, though this initiative 'underperformed' with low-single-digit declines in the latest quarter, and analysts maintain a 'show-me' stance citing ongoing pressure on core apparel and footwear businesses

Kohl's Turnaround Efforts Face Wall Street Skepticism

Key Performance Metrics:

Kohl's stock has plummeted nearly 70% over the past five years, though shares spiked 20% following its most recent earnings report. The retailer posted $3 billion in revenue last month—its best comparable sales growth in four years—but still projects full-year sales between down 2% and flat. At its peak in fiscal year 2019, Kohl's generated $20.23 billion in revenue.

Strategic Missteps:

The department store retailer lost relevance by abandoning core strategies that made it successful. Under previous leadership, Kohl's eliminated key categories (petites, jewelry), reduced coupon offerings, and shifted toward off-price retail instead of proprietary brands. These decisions alienated its traditional customer base, according to analysts.

Turnaround Plan:

CEO Michael Bender, who joined in late 2025, is returning to Kohl's foundational value proposition: proprietary brands, coupons, Kohl's Cash rewards, and product assurance. The company is also targeting younger consumers through Sephora shop-in-shops, though this initiative underperformed slightly in the recent quarter with low-single-digit declines.

Market Competition:

Kohl's faces intense pressure from Amazon, Target, TJX, and other value-focused retailers amid an environment where cost-conscious consumers demand maximum value. The broader decline of traditional department stores compounds these challenges.

Investor Sentiment:

Wall Street remains cautious. TD Cowen rates the stock at "hold," calling Kohl's a "show-me" story despite acknowledging progress. Analysts cite continued pressure on core apparel and footwear businesses and concerns about the credit-reliant consumer base.

Bender acknowledged the company is in "early innings" of recovery and hasn't "planted the flag" on success yet.