Has Kohl's (KSS) Stock Been Good for Investors?

Kohl’s stock has seen a rollercoaster year, rising 64% in 2024 but falling 42% over the past five. The retailer now sits among so-called meme stocks, grouped with Krispy Kreme, Opendoor Technologies, and Rocket Companies under the acronym DORK. Despite a recent bump in share price, the company faces deeper financial struggles and stiff competition from retail giants.

The department store chain reported a positive net income in the third quarter, but this was largely due to a one-time tax adjustment rather than strong operating performance. Meanwhile, its core business continues to weaken, with net sales and comparable sales declining year over year. Full-year projections suggest a further drop of 3.5% to 4% in net sales.

Kohl’s financial health remains shaky. The company spent $75 million on interest expenses in Q3—nearly matching its $73 million in operating income. Its balance sheet shows a quick ratio of just 0.12, indicating low cash reserves and heavy liabilities. Earlier this year, the retailer slashed its dividend by 75%, though it still offers a modest 2.18% yield. The company also struggles against fierce competition. Rivals like Walmart and Amazon have expanded their market share through e-commerce and aggressive pricing. Target has boosted same-store sales and digital growth, while TJX Companies—owner of T.J. Maxx, Marshalls, and HomeGoods—has thrived with its off-price model. Macy’s, on the other hand, has faced declines, closing stores and losing sales. Kohl’s has tried to adapt with partnerships and omnichannel strategies, but its performance remains inconsistent.

Kohl’s short-term stock surge contrasts with its long-term challenges. High interest costs, narrow profit margins, and a weak cash position add to the pressure. With competitors strengthening their positions, the retailer’s path to stability remains uncertain.