Jim Cramer Sees Early Signs of Turnaround at Kohl’s as Analysts Watch KSS Amid Retail Rebuild

Kohl’s Corporation (KSS) is drawing renewed attention from market commentators, with Jim Cramer describing recent developments as 'the beginning of a rebuild that’s worth watching.' The retail giant, which reported adjusted earnings per share of $0.89 for Q4 2025—a 14% improvement from the prior-year quarter—has begun to demonstrate margin recovery and inventory normalization. Despite a 7.3% decline in same-store sales in Q3 2025, comparable store traffic increased by 3.1% in Q4, signaling potential consumer re-engagement. The company’s ongoing transformation includes a 25% reduction in store count since 2022, with 112 locations closed by early 2026, focusing on high-traffic urban and suburban markets. Kohl’s also accelerated digital enhancements, increasing online sales to 22% of total revenue in Q4 2025, up from 18% in the same period the prior year. These moves are part of a broader strategy to improve operating efficiency, with SG&A expenses declining 12% year-over-year in 2025. While KSS trades at a 12.3x forward P/E, below the S&P 500 retail sector average of 16.7x, analysts remain cautious. Competitors like Walmart (WMT) and Sysco (SYY) continue to outperform on scale and cost leadership, but Kohl’s improved inventory turnover ratio—rising to 4.8x in Q4 from 4.1x in Q4 2024—suggests operational discipline is taking hold. The stock has gained 6.2% in the past month, though it remains down 18% year-to-date amid macroeconomic headwinds. Market watchers are monitoring whether the recent momentum in customer traffic and margin expansion can sustain into 2026. If Kohl’s can maintain same-store sales growth above 2% and reduce net losses to under $50 million in 2026, the turnaround narrative may gain broader investor traction.