Kohl’s Corp. ended its 2025 fiscal year with net sales down 4%, but the Menomonee Falls-based retailer did improve its profitability compared to 2024.

The results came in better than the company’s outlook at the start of the year when executives were forecasting a 5% to 7% decline in net sales.

For fiscal 2026, the company is forecasting both net sales and comparable sales to be flat to down 2%.

Outside of 2021 when sales increased 23% as a recovery from the COVID-19 pandemic, Kohl’s hasn’t seen a year-over year net sales increase since 2018. Even a decrease of 2% would represent the best non-COVID related result since 2019.

Still, 2025’s total net sales of $14.78 billion puts the company’s topline results below 2020 levels.

“We are ending 2025 in a stronger position than we started, with important work still ahead of us,” said Michael Bender, chief executive officer of Kohl’s. “Over the past year, our efforts have been focused on resetting our foundation. This focus is intended to stabilize the business and strengthen our operational ability to build for a stronger future. In 2025, we made meaningful progress, despite our Q4 topline coming in softer than our expectations.”

The company’s gross margin came in at 37.5% for the year, up three tenths from the prior year, and selling, general and administrative expenses were just under $5.1 billion, a roughly $220 million decrease.

Ultimately, net income for the year was $272 million, up from $109 million in 2024. Fiscal 2025 did benefit from a $129 million gain from the settlement of a lawsuit over credit card interchange fees.

Bender said the company was “not pleased” with its fourth quarter sales results which included a 3.9% decrease in overall net sales and a 2.8% decrease in comparable store sales. In the third quarter, comparable store sales were down just 1.7%.

Weather was one factor impacting the fourth quarter with severe storms at the end of January closing about half of the company’s stores and accounting for around 70 basis points of the 2.8% decline, according to Bender.

He did point to other issues that impacted the company’s performance to end the fiscal year, including the need to better execute its fall seasonal business.

“The softness in this category uncovered some operational opportunities for us with regard to our inventory depth and allocation,” Bender said. “We do not consistently have the right product and the right quantity in the right places.”

He also highlighted the need to attract customers during important stretches during the quarter.

“We needed to offer breakthrough pricing during our key holiday shopping periods to drive more excitement for customers to choose Kohl’s,” Bender said. “During the fourth quarter, we lost some competitive ground during high traffic shopping windows, including Black Friday, Cyber Monday, and the week following Christmas.”

“We know consumers are more value conscious, and there is opportunity for us to regain share during these windows through strong promotional statements that better align to our customer needs and priorities,” he added. “Consistent and differentiated value statements across marketing, in- store, and online will be a catalyst to improve our performance.”

The company’s 2026 plans include building on its efforts from 2025. Those include a more curated and balanced assortment of products, investing in key styles and categories while reducing redundancy. Executives also plan to continue an increased emphasis on Kohl’s proprietary brands and build on its impulse initiative.

“Following the rollout of an impulse queue line in nearly all of our stores, we have identified more ways to inspire our customers and drive highly incremental impulsive shopping behaviors,” Bender said. “To capitalize on this, we are implementing the deal bar and impulse toy tower, both of which are specifically designed to offer compelling value on items like seasonal home decor and trending toys with all products priced under $10.”