Kohl's stock was down 35% on the year heading into Thursday, but by lunchtime it had clawed back a chunk of that in one day.
The reason: the company posted its best quarterly comparable sales performance in four years, and CEO Michael Bender said Kohl's is "knocking on the door of growth." Investors agreed.
Comparable sales, which strip out new stores and measure how existing stores are doing, fell 1.1% last quarter, which sounds bad but is actually good.
The drop the quarter before was 2.8%, so the trend line is what mattered.
The rest of the report cleared the bar:
Bender gave credit to "great discipline," tight expense management, and a cleaner inventory pile.
In English: less stuff piling up in the back room means fewer markdowns next quarter.
The pop also looks bigger because the stock was sitting near a multi-year low going into the quarter, after months of pressure from slowing sales and softer foot traffic in suburban shopping malls.
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Kohl's main shoppers are lower- and middle-income families, and that group has been getting squeezed for two years by high gas prices, sticky inflation, and a soft labor market.
Bender talked about "families sitting around the kitchen table trying to make life work," and said Kohl's strategy has to lean harder into value than it ever has.
The full-year outlook reflects that caution, with Kohl's expecting sales to land somewhere between flat and down 2%.
Adjusted earnings per share, profit per share of stock, are projected at $1 to $1.60.
The same lower-income squeeze has been showing up across retail too, with names like Dollar General, Family Dollar, and Target flagging similar pressure on their core shoppers.
The $190 million in tariff refunds the company says it is eligible for is the wild card.
Kohl's confirmed it has applied, but it has not received a dollar yet, and if that money comes through, it lands straight on the bottom line.
Beyond the refund, the broader turnaround playbook still leans on the Sephora at Kohl's beauty business and a refreshed value-focused strategy, none of which moves the needle in a single quarter.
That is partly why Bender keeps saying the company has "a lot of work ahead."
A 20% pop is fun, but the next quarter is the one that decides whether the turnaround is real.
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