Kohl's was once a retail darling, carving out market share as a department store catering to the middle-income American consumer with coupons and deals that drove loyalty.
But over the past five years, Kohl's stock has lost nearly 70% of its value, plummeting as the retailer reported weak sales.
As department stores struggle to stay relevant and middle-income consumers face budget pressure, Kohl's is now trying to reinvigorate sales by leaning back into its core value proposition and investing in the store experience to ensure customers find what they need and keep coming back for more. Though Wall Street analysts believe the retailer has more work to do, investors have started to take notice: Kohl's shares have climbed more than 130% in the past year.
"For us, it's really about making sure that we are picking a lane," CEO Michael Bender told CNBC. "Sitting in the middle of the retail landscape like we do, selling the products like we do, that are admittedly more discretionary than others, means that you have to pick a lane and decide who you're serving, and that you understand that customer really, really well."
The company, which went public in 1992, saw its peak in the early 2000s as department stores gained traction around the U.S. Kohl's was known for its value, proprietary brands, coupons and Kohl's cash rewards, enjoying success along with other department store chains like Macy's and Bloomingdale's.
At its height, Kohl's commanded major market share, with its stock reaching an all-time high of $82 per share in late 2018 and the company reporting revenue of $20.23 billion for the fiscal year ended February 2019.
Kohl's 5 year chartBut soon after, the retailer began to lose traction. While department stores have broadly struggled during that time, Kohl's also faced specific issues that contributed to revenue declines.
"As a department store, they've kind of been struggling for a number of years," Chuck Grom, an analyst at Gordon Haskett, told CNBC.
Now, the company is working to stabilize its business, return to growth and win back a customer base that Bender said Kohl's never completely lost.
Through changing its assortment, limiting coupon usage and leaning into off-price retail instead of proprietary brands, Kohl's "alienated" its core customers, forcing them to go elsewhere, Grom said.
Grom, who has been covering Kohl's for years, said the retailer went wrong when it leaned into being an off-price retailer.
"I think companies need to realize who their customer bases are and not try to become somebody they're not," he said. "I think too often retailers want to become what somebody else is, and that often can backfire on you."
It's a move that Bender said set Kohl's down the wrong path, leading to years of stagnant sales, declining foot traffic and "drifting" business strategies. The company saw rapid executive turnover and changes to its credit card and promotional offerings, which also came as it dealt with increased competition.
"We made some decisions where we took away categories, for example, petites and jewelry, we've spoken about that in previous earnings calls and other public discussions, those are categories, as an example, that are not substitutable," Bender said. "We stopped listening to the customer."
Kohl's paid the price. Wall Street lost confidence in the retailer, which posted quarter after quarter of slumping sales. At the same time, competitors like Walmart and T.J. Maxx were snatching up market share left behind by Kohl's, and online retailers such as Amazon were growing.
Winning over cost-conscious consumers hit by elevated inflation in recent years also became more difficult as more retailers put a premium on value.
"There always is this concern that can department stores actually grow for any meaningful period of time? There's lots of competition in terms of off-price specialty brands going direct-to-consumer," said Blake Anderson, an analyst covering Kohl's at Jefferies. "The space has really evolved over time, and I think the way that Kohl's has competed has been significantly tied to value, and so winning that customer based on value is becoming very difficult."
Sonia Lapinsky, managing director of retail at consulting firm AlixPartners, said a pressured consumer coupled with the fall of the traditional department store model meant the broader economy wasn't on Kohl's side, either.
"They're looking for options that are giving them their best bang for their buck," she said. "They want value, they want brands, they want the cheapest price they can get it. And there's a lot of compelling propositions out there from these other retailers."
Lapinsky added that priorities at Kohl's changed multiple times after the company's peak, which led in part to its decline.
"Over the years, we've seen a lot of shifting strategies at Kohl's, specifically whether they're getting into athletic and athleisure, or they're doubling down on fashion, or now they're growing private label, and it's a constant kind of shift of what the customer can expect when they walk into the store," Lapinsky told CNBC. "I think that's caused some confusion."
Since Bender took over as CEO in late 2025, he said he's been focused on returning to what always worked for Kohl's: proprietary brands, value, coupons and assurance customers will reliably find the products they want at the right prices.
"In those periods of time, Kohl's was known for taking care of families and making sure that there was assurance that what they were looking for, added value, was going to be available to them," Bender said. "Some of the restoration of that theme that made Kohl's great back then, we think is still relevant today. Customers want convenience."
In its most recent earnings report last month, Kohl's posted its best comparable sales growth in four years, even as it saw revenue decline. The retailer reported revenue of $3 billion, topping Wall Street estimates, and projected full-year net sales and comparable sales to be in a range of down 2% to flat.
At the time, Bender said the quarter marked Kohl's "knocking on the door of growth." The stock spiked 20% following the report.
Grom, the Gordon Haskett analyst, said he believes if Kohl's hadn't returned to its core identity, it would have been "problematic" for the retailer.
"I think their strategy actually makes a lot of sense right now," Grom said. "I think getting back to who they are is going to be important for their success."
Kohl's, which has traditionally catered to older shoppers, has also been trying to capture younger consumers, especially through its Sephora shop-in-shops, designed to draw Generation Z into the store.
Though the Sephora shops struggled slightly in the retailer's most recent quarter — with Bender saying on a call with analysts that the business "underperformed" and declined by a low-single digit percentage — it's historically delivered billions in sales and growing momentum.
"What's been a really interesting development for them is a creative use of their square feet and a way to try to drive not only sales, but new and younger customers," Anderson, the Jefferies analyst, said. "There's often some pushback on department stores, that they were established during a different generation and some of the customers do skew older, so ensuring they maintain relevancy for younger consumers is important."
Bender said the younger generation is "who we can grow with in the future," as Kohl's works to convert that customer to buy deeper in the store after coming in for Sephora.
Despite Kohl's progress, Wall Street may not be convinced yet that the company is making its return to being a household name.
In a June note, TD Cowen analysts wrote that they believe the company is "making the right strategic decisions" but rated the stock at hold due to underperformance in the apparel and footwear businesses.
"Kohl's remains a 'show-me' story, but results appear better than feared with [comparable sales]," the analysts wrote after the most recent earnings report. "We continue to view simplified promotions, rebalanced inventory and leveraging success in juniors as keys to the turnaround. On first look, progress in product and inventory is encouraging, though pressure on the core credit consumer and 'other revenue' remains a key question."
Lapinsky said because of its reputation for deals and promotions, Kohl's has to offer a strong value proposition in addition to a worthwhile in-store experience, which sets it apart from other retailers.
"They have to have a compelling product offering, they have to have the right prices, they have to have the product that consumers want to go into the store and to know that they're getting the best deal — that's really what the consumer is looking for, and that's where they've gone other places for," she said.
Lapinsky added that while Kohl's is clearly trying to improve its balance sheet and bottom line, the market will have to wait and see how it fares against rising competition as it tries to win back customers.
Still, Bender said while the signs toward recovery are encouraging, it's only the first step in a longer road into the "neighborhood" of growth.
"We have not arrived yet," Bender said. "I don't want anyone to feel like we planted that flag and said, 'We're done.' We're still in the early innings, quite honestly, but we are moving in a direction that is much more positive and aligned with a lot more clarity about the direction that we want to take the company."
