Kohl’s shares are soaring again—and this time its not just a meme stock.
The department store chain’s shared surged on Wednesday as the company raised its full year financial outlook and topped expectations despite sales decline.
The company’s shares saw uptick in mid-July, as it caught the attention of the r/wallstreetbets Reddit thread, doubling the stock price and joining the meme stock rally that month. Following Wednesday’s earnings announcement, Kohls shares jumped by 27% in pre-market trading and share are up 17% at the time of publishing.
Kohl’s beat its quarterly earning estimate, coming out at $0.56 in contrast to the $0.33 Zacks Consensus Estimate. Additionally, the company saw a slight uptick in revenue, coming out at $3.35 billion compared to the $3.32 billion estimate by LSEG analysts.
Despite the favorable outlook, Kohl’s still saw a decrease in sales, with a 5.1% year-over-year decline.
“Our team remains focused on delivering progressive improvement throughout the remainder of the year against a challenging economic backdrop,” Kohl’s interim CEO Michael Bender said in the earnings report.
Getting back on their feet
The company’s solid quarter can be largely attributed to its turnaround efforts and major cost cutting measures, including store closures and workforce reductions.
Earlier this year, the department store closed 27 stores across the country, and saw a 10% reduction of its corporate workforce.
The company’s turnaround efforts include a reassessment of its assortment of products, as well as introducing more coupons for branded items.
“We were able to expand our gross margins, reduce our inventory, and lower our expenses, leading to solid second quarter earnings,” Bender said.
Bender’s leadership followed the termination of former Kohl’s CEO Ashley Buchanan earlier this year, becoming the third CEO in three years. Buchanan, who held the job for nearly four months, stepped down due to involvement in an investigation surrounding vendor transactions with undisclosed conflicts of interest.
“Kohl’s second quarter performance is a testament to the progress we are making against our 2025 initiatives,” Bender said. “This resulted in sales performance that came in ahead of our expectations.”
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