Kohl’s Corp., despite a decline in sales during the fourth quarter, managed to improve its bottom-line performance.

For the fourth quarter ended Jan. 31, operating income was $212 million compared to $126 million in the prior year. As a percentage of total revenue, operating income was 4.1 percent, an increase of 176 basis points year-over-year.

Adjusted operating income was $510 million compared to $509 million in the prior year.

Net income was $125 million, or $1.07 per diluted share, compared to net income of $48 million, or 43 cents per diluted share, and adjusted net income of $106 million, or 95 cents per adjusted diluted share, in the prior year. 

Net sales decreased 3.9 percent year-over-year, to $5 billion, from $5.2 billion in the year-ago period, with comparable sales down 2.8 percent.

Kohl’s beat Wall Street’s profit expectations but fell short on the sales side, pulling the stock price down about 4.5 percent to $14.11 in pre-market trading Tuesday.

“We are ending 2025 in a stronger position than we started, with important work still ahead of us,” said Michael J. Bender, Kohl’s chief executive officer, in a statement Tuesday. “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. We were able to manage the business with discipline, deliver improved earnings, and generate meaningful cash flow, all of which helped us strengthen our balance sheet.”

“In 2026, we are committed to further strengthening our foundation by addressing operational opportunities, building on our strengths, and modernizing our processes. We are confident that the work we are investing in now is essential for Kohl’s long-term benefit,” Bender continued.

For 2026, Kohl’s is forecasting net sales and comparable sales to range from a decline of 2 percent to flat. Adjusted diluted earnings per share is seen in the range of $1 to $1.60.

Bender became Kohl’s CEO in November 2025 after spending six months as interim CEO and a member of the board since 2019. He is a former Eyemart Express, Walmart, L Brands, Pepsi and Cardinal Health executive.

Kohl’s turnaround efforts include bolstering private and exclusive lines. This month, Kohl’s launched Sea and Skye, a teen and tween girls private label casual clothing line. Kohl’s has also been expanding its FLX athleisure private brand, rolling out Babies R Us shops, adding brands to its Sephora beauty shops, while also resetting store presentations.

For all of 2025, net sales decreased 4 percent year-over-year, to $14.8 billion, from $15.4 billion, with comparable sales down 3.1 percent.

Operating income was $624 million compared to $433 million in the prior year. Adjusted operating income was $510 million compared to $509 million in the prior year.

There was a gain on a legal settlement of $129 million from a credit card interchange fee lawsuit.

Net income for the year was $272 million, or $2.38 per diluted share, up from $109 million, or 98 cants a diluted share, and adjusted net income was $186 million, or $1.62 per adjusted diluted share.

Cash flow provided by operating activities was $1.4 billion compared to $648 million in the prior year.