Kohl's sales fell for a fourth straight year in fiscal 2025, yet the business still produced strong cash that helped cut debt. The question is whether margins and cash hold while sales keep shrinking.
A pair of school jeans, a winter coat or a new set of bath towels may well come from Kohl's. The chain sells clothing, accessories, shoes and home goods to families on moderate incomes through its stores, its Kohls.com website and its app. Every store is in the United States. Kohl's buys merchandise and sells it for more than it paid. It keeps what is left after paying for the stores, warehouses and online order handling behind those sales.
Shoppers pay for the goods themselves, and a family can put these purchases off when money is tight. Merchandise is almost the whole business. On each item, Kohl's earns the gap between its price and what the item cost, after any markdowns, the price cuts used to clear unsold stock. In , the year ended January 31, 2026, (sales minus the cost of the goods, as a share of sales) was about 41%. But a heavy cost base takes most of it. Selling and running costs, which include stores, staff, distribution and technology, took about 33% of sales. Because that network stays largely fixed, a point gained or lost on merchandise decides whether the year is good or bad.
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