Is Kohl’s Stock A Buy Right Now?

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Shares of Kohl’s (KSS) have returned 55.7% over the past twelve months, compared with 15.1% for the S&P 500. You would want to know how much the tariff refunds that helped its latest quarter were worth, and how heavily Kohl’s debt weighs on what shareholders own. The company owes more than twice what its stock is worth. What are you paying for when you buy a Kohl’s share?

What A Kohl’s Share Buys Once Debt Is Counted

A Kohl’s share represents a small slice of a business financed mostly with debt. Kohl’s shares are worth $2.8 billion in total, while the whole business is valued at $8.4 billion once its debt, net of cash, is added. Because lenders are paid before shareholders, any rise or fall in what the business is worth moves that smaller equity slice by a larger percentage.

Measured on profit, Kohl’s stock sells for 10.4 times its earnings over the past twelve months, compared with 23.0 for the S&P 500. That profit totaled $270 million, with $151 million earned in the single quarter that ended August 1, 2026. About $100 million of tariff refunds lowered that quarter’s costs, set against $151 million of profit, and the company’s outlook does not count on refunds repeating.

How Much Does Kohl’s Earn On Its Sales?

Kohl’s keeps little of its sales as profit. Its operating margin over the past twelve months was 3.9%, compared with 18.5% for the S&P 500. With a margin that thin, a small change in sales or costs makes a large change in profit.

The latest quarter shows how large that change can be. Management said on the August 26, 2026 call that Kohl’s received about $150 million of tariff refunds in the quarter that ended August 1, 2026, and about $100 million of that total lowered its cost of merchandise sold. Gross margin rose 305 basis points from a year earlier, yet management put the rise at only about 5 basis points once the effect of tariffs is taken out. The company’s outlook for the year leaves out any further tariff refunds.

What Could Help Or Hurt Kohl’s Shareholders From Here?

On the good side, Kohl’s is turning cash into lower debt. It generated $1.03 billion of free cash flow over the past twelve months, compared with $480 million a year earlier. Management said its debt repurchases over the last three quarters brought long-term debt to its lowest level since 2007. With debt this large against the stock, each dollar of debt retired shrinks the claim lenders hold ahead of shareholders. Kohl’s is also restarting its share buybacks, with about $100 million planned for 2026.

On the other side is price competition. Management described its core low- to middle-income customer as financially pressured and said it expects a lot of promotional activity in the market. It plans to put some of the tariff money into price, media and store payroll. A company that earns so little on each dollar of sales has little room for deeper discounts.

Kohl’s is expected to report next in November 2026. The number to watch is how much its gross margin changes from a year earlier once the effect of tariffs is taken out.

Does This Mean You Should Act On KSS?

Our purpose is to inform you with unique data so you make the right investment decisions. That said, betting on a single stock is always risky, no matter which direction you choose.

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