Short Squeeze And Earnings: Why Kohl's Stock Spiked Thursday

Kohl’s Corp. (NYSE:KSS) stock rose Thursday after the retailer reported better-than-expected first-quarter results, helped by stronger sales trends and improved merchandise execution.

High Short Interest Adds Volatility Potential

The stock surged over 19%, as high short interest—exceeding 31% of the float—likely acted as a catalyst, amplifying buying pressure and accelerating the rally.

The company has a short float of 25.762 million shares, representing 31.97% of its publicly traded float, indicating a very high level of short interest among investors betting against the stock.

Kohl’s Quarterly Results

Kohl’s reported a first-quarter adjusted loss of 13 cents per share, narrower than analysts’ expectations for a loss of 19 cents per share.

Quarterly revenue totaled $3.167 billion, topping Wall Street estimates of $2.991 billion.

Comparable sales declined 1.1% year over year in the quarter. Despite the decline, the result marked Kohl’s strongest quarterly comparable-sales performance in more than four years, supported by tighter cost controls and improved operational execution.

Gross margin expanded 4 basis points year over year to 39.9%, reflecting modest profitability improvement.

Operating income fell to $46 million from $60 million a year earlier, while operating margin declined 41 basis points year over year to 1.4%.

The company ended the quarter with $429 million in cash and no outstanding borrowings under its asset-based lending facility.

Kohl’s CEO Michael Bender said customers remain under pressure as they juggle higher costs for essentials such as gas, food and utilities.

He said Kohl’s is focused on helping shoppers stretch their dollars by offering sharper prices, stronger quality and more stylish merchandise, especially in apparel.

Bender added that the company sees opportunity in balancing national brands with its own proprietary labels across apparel, home and other categories.

Brand and Digital Performance

Private-label brands posted a 6% year-over-year increase in comparable sales, driven by strength in juniors apparel and women’s sportswear brands including SO, LC Lauren Conrad and Sonoma.

Digital sales rose 4% from a year earlier, while store sales declined as transaction volumes softened.

Management said the company continues to simplify its assortment strategy by reducing SKU complexity while expanding key product categories to improve store execution and digital conversion.

Kohl’s Dividend And Outlook

On May 20, Kohl’s board declared a quarterly cash dividend of 12.5 cents per share. The dividend will be paid June 24, 2026, to shareholders of record as of June 10.

Kohl’s affirmed its fiscal 2026 outlook and continues to expect adjusted earnings of $1.00 to $1.60 per share, compared with analysts’ estimates of $1.36 per share.

The retailer also maintained its sales forecast of $15.216 billion to $15.527 billion, above Wall Street expectations of $14.756 billion.

Kohl’s continues to project comparable sales ranging from a 2% decline to flat growth for the year.

KSS Price Action: Kohl’s shares were up 19.10% at $15.40 at the time of publication on Thursday, according to Benzinga Pro data.

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