Kohl's generates revenue through three primary mechanisms that together produced $15.46 billion in FY2025. The first and dominant stream is Net Sales from merchandise, which totaled $14.78 billion in FY2025, down 4.0% from $15.39 billion in FY2024. This stream breaks down into six merchandise categories: Women's ($3.60 billion, 24.4% of net sales), Accessories including Sephora ($3.12 billion, 21.1%), Men's ($2.93 billion, 19.8%), Home ($2.21 billion, 15.0%), Children's ($1.70 billion, 11.5%), and Footwear ($1.21 billion, 8.2%). The Accessories category was the sole growth driver, increasing approximately 2% in FY2025, while all other categories declined — Women's down 5.7%, Men's down 4.8%, Home down 4.3%, Children's down 6.5%, and Footwear down 6.9%. The second revenue stream is Other Revenue, which generated $668 million in FY2025, down 10% from $742 million in FY2024. Other revenue includes credit card operations (finance charges, late fees, and other revenue less write-offs of uncollectible accounts), third-party advertising on Kohls.com, unused gift card breakage, and other non-merchandise revenue. The credit card program is a critical component: Kohl's has 28.5 million credit card accounts with a 45.3% penetration rate, and the average transaction value via Kohl's credit card is $127. Credit card revenue declined in FY2025 due to lower sales to Kohl's charge customers and a shift of certain credit-related expenses from SG&A against other revenue as account servicing moved to the third party that owns the accounts. The third revenue stream is the Sephora partnership, which operates as a shop-in-shop arrangement where Kohl's shares in operating profits. Sephora at Kohl's generated over $1.8 billion in sales in FY2024 and exceeded $3.1 billion in the Accessories category in FY2025. Kohl's business model is built on the 'off-price department store' positioning — carrying national brands at lower prices than traditional department stores through reduced overhead and perpetual promotional activity. The company operates 1,175 stores averaging approximately 80,000 square feet, with 69% located in suburban markets. Nine retail distribution centers and five e-commerce fulfillment centers support the omnichannel operation. Digital sales were approximately flat in FY2025 and represented 29% of net sales (28% in FY2024). The company's proprietary brands — Sonoma Goods for Life ($1.2 billion annual revenue), Apt. 9 ($890 million), and Simply Vera Vera Wang ($650 million) — generate higher margins than national brands and differentiate the assortment. Kohl's Cash, the company's loyalty program, drives repeat visits through dollar-off discounts earned on spending. The model's vulnerability is its dependence on middle-income consumers who are increasingly price-sensitive and shifting spending to discount retailers, off-price chains, and e-commerce. If the proprietary brand stream disappeared, Kohl's would lose approximately $2.7 billion in annual revenue and its primary margin advantage, as private label gross margins typically exceed national brand margins by 5-10 percentage points.