How Kohl’s lost its way — and is trying to become relevant again
Kohl’s It was once a retail darling, building market share as a department store serving middle-income American consumers with loyalty-boosting coupons and deals.
But over the past five years, Kohl’s shares have lost nearly 70% of their value, falling as the retailer reported weak sales.
As department stores struggle to stay relevant and middle-income consumers face budget pressures, Kohl’s is now trying to revive sales by leaning on its core value proposition and investing in the store experience to ensure customers find what they need and come back for more. Although Wall Street analysts believe the retailer has more work to do, investors are starting to take notice: Kohl’s shares are up more than 130% in the past year.
“For us, it’s actually about making sure we pick a lane,” CEO Michael Bender told CNBC. “Sitting in the middle of retail like we do, selling products that are more discretionary than others, like us, means you have to pick a path and decide who you serve and understand that customer really well.”
A Kohl’s store in Sun Valley, California, July 22, 2025.
Alisha Jucevic | Bloomberg | Getty Images
The company, which went public in 1992, reached its peak in the early 2000s as department stores gained traction in the United States. Kohl’s has become known for its value, trademarks, coupons, and Kohl’s cash rewards and has enjoyed success along with other major department store chains. Macy’s and Bloomingdale’s.
At its peak, Kohl’s had a large market share, with its shares reaching an all-time high of $82 per share in late 2018. reporting Revenue for the fiscal year ending February 2019 was $20.23 billion.
Kohl’s 5-year chart
But soon the retailer began to lose traction. While department stores generally suffered during this time, Kohl’s also faced specific issues that contributed to revenue declines.
“They’ve been struggling as a store for a number of years,” analyst Chuck Grom of Gordon Haskett told CNBC.
Now the company is working to stabilize its business, return to growth and regain some success. It’s a customer base that Bender said Kohl’s has never completely lost.
It’s losing its core
Grom said that by changing its assortment, limiting the use of coupons and shifting to low-priced retail rather than private brands, Kohl’s was “alienating” its core customers and forcing them to go elsewhere.
Grom, who has covered Kohl’s for years, said the retailer made a mistake when it pivoted to being a low-price retailer.
“I think companies need to understand who their customer base is and not try to be someone they’re not,” he said. “I think a lot of times retailers want to be what someone else is, and a lot of times that can backfire on you.”
It’s a move that led Kohl’s down the wrong path, leading to years of stagnant sales, decreased foot traffic and a “drift” of its business strategies, according to Bender. The company has seen rapid executive turnover and changes to credit card and promotional offers as it struggles with increased competition.
“We’ve made some decisions where we’ve removed categories, for example, minions and gems, we’ve talked about in our previous earnings calls and other public discussions that those are non-substitutable categories as examples,” Bender said. “We stopped listening to the customer.”
Kohl paid the price for this. Wall Street has lost confidence in the retailer, which has seen sales decline every quarter. At the same time, competitors Walmart And TJ Maxx We were grabbing market share left behind by Kohl’s and online retailers. Amazon they were growing.
Winning over cost-conscious consumers, hit by rising inflation in recent years, has become more difficult as more retailers place a premium on value.
“Is there always a concern that department stores can actually grow for a meaningful period of time? There’s a lot of competition in terms of lower-priced private brands that go direct to consumer,” said Blake Anderson, an analyst at Jefferies who covers Kohl’s. “The space has really evolved over time, and I think the way Kohl’s competes is very much based on value, and so it becomes very difficult to win the value-based customer.”
Sonia Lapinsky, managing director of retail at consulting firm AlixPartners, said the depressed consumer combined with the collapse of the traditional department store model means the broader economy is also not on Kohl’s side.
“They are looking for options that will give them the best bang for their buck,” he said. “They want value, they want brand, they want the cheapest price they can get. And other retailers have a lot of interesting offers.”
Lapinsky added that priorities at Kohl’s changed many times after the company reached its peak, which partly led to the decline.
“Over the years, we’ve seen a lot of strategies change at Kohl’s, specifically moving into athleisure and sportswear, either doubling down on fashion, or now growing the private label, and it’s a constant shift in what the customer can expect when they walk into the store,” Lapinsky told CNBC. “I think this has caused some confusion.”
I turn the page
“At that time, Kohl’s was known for taking care of families and providing assurance that they would be given what they were looking for, which was added value,” Bender said. “We think some of the restorations of the theme that made Kohl’s great back then are still relevant today. Customers want convenience.”
In its most recent earnings report last month, Kohl’s reported its best comparable sales growth in four years despite declining revenue. The retailer reported revenue of $3 billion, above Wall Street forecasts, and forecast full-year net sales and comparable sales to be in a flat range, down 2%.
At the time, Bender said the quarter signaled Kohl’s “knocking on the door of growth.” The stock rose 20% following the report.
Grom, the Gordon Haskett analyst, said he believes it would have been “problematic” for the retailer if Kohl’s had not returned to its core identity.
“I think their strategy really makes a lot of sense right now,” Grom said. “I think getting back to who they are will be important to their success.”
Kohl’s, which has traditionally appealed to older consumers, is also trying to capture younger consumers through Sephora in-stores designed specifically to attract Generation Z to the store.
Although Sephora stores suffered a bit in the retailer’s latest quarter — Bender said the business “underperformed” and fell by a low-single-digit percentage on a call with analysts — that’s historically continuing Billions of dollars delivered in sales and growth momentum.
“It’s been a really interesting development for them, a creative use of their square footage and a way to try to increase not only sales but also new and younger customers,” Jefferies analyst Anderson said. “There is some pushback that department stores are often set up in a different generation and some customers are older, so it’s important to ensure they remain relevant for younger consumers.”
Bender said the younger generation is “the one we can grow with in the future”; Kohl’s is working to convert this customer into deeper in-store purchases after they arrive at Sephora.
Despite Kohl’s progress, Wall Street may not yet be convinced that the company has returned to being a household name.
In a June note, TD Cowen analysts wrote that they believed the company was “making the right strategic decisions” but gave the stock a hold rating due to underperformance in its apparel and footwear businesses.
“Kohl’s remains a ‘show me’ story, but results look better than feared [comparable sales]”We continue to view simplified promotions, rebalanced inventory, and driving success in the youth as key to a turnaround. While on the face of it, product and inventory progress is encouraging, pressure on core credit consumers and ‘other revenues’ remains an important question,” analysts wrote after the latest earnings report.
Because of its reputation for deals and promotions, Kohl’s must offer a strong value proposition in addition to a valuable in-store experience that sets it apart from other retailers, Lapinsky said.
“They need to have a compelling product offering, they need to have the right prices, consumers need to walk into the store to get the product they want and know they’re getting the best deal – that’s really what the consumer is looking for and they’ve gone elsewhere for that,” he said.
Lapinsky added that while Kohl’s is clearly trying to improve its bottom line and profitability, the market will have to wait and see how it fares in the face of increased competition as it tries to win back customers.
Still, Bender said that while the signs of recovery are encouraging, this is only the first step on a longer road to the growth “neighbourhood.”
“We’re not there yet,” Bender said. “I don’t want anyone to think that we’re planting that flag and saying, ‘We’re done.’ We’re still in the early stages, to be honest, but we’re moving in a direction that’s much more positive and much more clearly aligned with the direction we want to take the company.”
