Kohl's Corporation Revenue & Financials

A $129 million gain from settling a credit card interchange fee lawsuit — net of legal fees — boosted Kohl's FY2025 reported operating income by 29% and net income by 47% versus the prior year. Strip that settlement out and the underlying operating performance looks considerably weaker than the headline $272 million net income suggests. Revenue declined from $17.48 billion in FY2023 to $16.22 billion in FY2024 to $15.46 billion in FY2025 — a three-year sequence of consecutive annual sales compression that reflects a structural loss of customer visits rather than a cyclical correction. The FY2025 10-K also notes that certain credit card expenses shifted from SG&A against Other Revenue following the transfer of account servicing to a third party, causing an $84 million decline in Other Revenue that management expects to normalize in FY2026. The market capitalization of $1.839 billion against $15.46 billion in annual revenue implies a price-to-sales ratio below 0.12 — a valuation that prices Kohl's closer to a distressed retailer than a going concern with 1,175 stores and a functioning credit card program. Net income of $272 million against a market cap of $1.839 billion produces a price-to-earnings ratio below 7, which would suggest a cheap stock if earnings were stable. They are not. The Sephora expansion is the most concrete bet on future traffic recovery. The credit card remains the most profitable single asset in the business. Whether those two elements can offset the decade-long trend of middle-income consumers migrating to off-price chains and e-commerce is the question that the current market capitalization has already answered pessimistically.