Kohl's Q2 10-Q: $150M Tariff Refunds Boost Margins, Debt Cut by $113M
KSS sits 68% above its 52-week low of $11.38.
Summary
Kohl's Q2 10-Q reveals $150M in tariff refunds (boosting gross margin to 43.0%), $113M in debt reduction, and cash up to $821M — but comparable sales still fell 0.9%.
Key Events · Earnings and Guidance · KSS
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Tariff Refunds Boost Gross Margin
Received $150M in IEEPA tariff refunds, with $100M reducing cost of merchandise sold — driving gross margin up 305 bps to 43.0% of net sales.
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Debt Reduced by $113M
Repurchased $113M of notes year-to-date, recognizing a $15M gain on extinguishment; long-term debt fell to $1.325B from $1.436B at fiscal year-end.
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Liquidity Strengthens
Cash and cash equivalents rose to $821M from $174M a year ago; revolving credit facility extended five years to June 30, 2031 with zero drawn.
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Credit Outlook Improves
S&P upgraded outlook to stable; ratings stand at Moody's B2 (Positive), S&P B+ (Stable), Fitch BB- (Negative).
Analysis · KSS · Trade & Services
Kohl's second-quarter 10-Q confirms the earnings beat reported on August 26, but adds material new detail: the company received $150 million in IEEPA tariff refunds, of which $100 million directly reduced cost of goods sold — the primary driver behind the 305 basis point gross margin expansion to 43.0%. The balance sheet also strengthened meaningfully, with cash nearly quintupling year-over-year to $821 million and long-term debt reduced by $113 million through open-market repurchases. The revolving credit facility was extended five years to 2031, and S&P upgraded its outlook to stable. These are tangible improvements in liquidity and leverage that support the company's plan to resume $100 million in share repurchases, but the underlying sales trend remains weak — comparable sales fell 0.9% and Sephora sales declined 4%.
How filings like this one have moved
In the 30 days to Sep 10, 2026, 30% of the 1973 measured filings Wiseek scored 7 moved their stock by 5% or more by the next session's close. The median move was -0.12%. These are measured outcomes after filings of this importance, not a forecast for this one.
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At the time of this filing, KSS was trading at $19.12 on NYSE in the Trade & Services sector, with a market capitalization of approximately $2.2B. The 52-week trading range was $11.38 to $25.22. This filing was assessed with positive market sentiment and an importance score of 7 out of 10.