Store Closures Halted Despite Sales Drop

Kohl’s shares remained in focus following its latest earnings report, as investors digested a mix of declining sales and improving profitability. As of writing, Kohl’s shares traded at $12.69, down 2.68% in the last 24 hours, 14.26 in the last 7 days, and 36.07% in the last 30 days. The retailer confirmed it will not close additional stores in 2026, offering some clarity after last year’s wave of shutdowns.

That announcement raises an interesting question. If store closures helped cut costs, why stop now?

Chief Executive Officer Michael Bender addressed the issue directly during the earnings call. He said the company has no plans to significantly reduce or expand its store footprint this year. Instead, leadership plans to optimize existing locations and improve performance across its network.

Kohl’s currently operates around 1,150 stores, with more than 90% generating profits. The closures in 2025 targeted underperforming locations and represented less than 3% of the total footprint.

Sales Decline Continues To Pressure The Business

Even as closure concerns ease, sales trends remain under pressure. The company reported a 3.9% drop in fourth-quarter net sales, which totaled $5 billion. Comparable sales also declined by 2.8% during the same period.

For the full year, net sales reached $14.8 billion, marking a 4% decline compared to the previous year. What continues to drive this weakness? Leadership points to one key issue: customer traffic.

Chief Financial Officer Jill Timm said the company still struggles to bring shoppers into stores. That challenge has persisted for several quarters and remains central to Kohl’s broader turnaround efforts.

Yet the report also included a notable contrast. While sales fell, profitability improved. Fourth-quarter net income reached $125 million, and earnings per share climbed to $1.07 from $0.43 a year earlier.

That improvement reflects tighter inventory management and cost controls. Still, the question lingers. Can profit gains continue if fewer customers walk through the doors?

Strategy Shifts Toward Productivity And Value

With store closures off the table for now, Kohl’s has shifted its focus toward maximizing efficiency. Management aims to increase productivity at existing locations rather than shrinking the footprint further. Bender emphasized that the company spent much of the past year resetting its operational foundation. The goal now centers on stabilizing performance and building a path toward long-term growth.

At the same time, Kohl’s continues to adjust its merchandising strategy. The retailer is leaning more heavily into value-driven offerings, including expanding proprietary brands and introducing more products priced under $10.

This approach targets budget-conscious consumers and aims to boost impulse purchases. Will it succeed in bringing shoppers back? That remains one of the key questions for 2026.

Analysts Question The Road Ahead

Despite the strategic shift, skepticism persists among analysts. Some view Kohl’s recent performance as one of the weakest within the mainstream retail sector.

Sales trends over a longer period add to those concerns. Since 2019, the company’s sales have dropped by nearly 24%, even after accounting for growth initiatives like Sephora shop-in-shops.

Looking ahead, Kohl’s expects full-year sales in 2026 to range from a 2% decline to flat growth. That outlook suggests a slow and uncertain recovery. Bender acknowledged the challenges, noting that the company’s path forward will not follow a straight line.

So where does that leave investors? On one hand, Kohl’s has stabilized its store base and improved profitability. On the other hand, declining sales and weak traffic continue to cast a shadow.