Will Kohl's Close More of Its Brick-and-Mortar Stores in 2026?

From mid- to late 2025, shares in Kohl’s Corporation (KSS +1.57%) were on a tear. At first, this was due to meme stock-related speculation. Then, it was due to increased bullishness about the discount retailer’s ability to successfully pull off a turnaround.

But starting in November, at the start of the holiday shopping season, Kohl’s rebound began to reverse. After an incredible surge from under $8.50 per share to $25, the stock has given back most of its gains, falling back to around $12. The latest sell-off occurred two weeks ago, following the company’s latest earnings release.

The earnings release suggests that the Kohl’s turnaround remains a work in progress. Will we see the retailer take more aggressive steps, including a new round of store closures? Let’s take a closer look at this consumer discretionary stock and find out.

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Kohl’s, the Q4 earnings pullback, and the prospect of store closures

On March 10, Kohl’s reported its fourth-quarter 2025 earnings. For the quarter, adjusted earnings of $1.07 per share beat sell-side forecasts of just $0.86 per share. However, net sales of $4.97 billion fell short of forecasts of $5.02 billion. Year over year, Kohl’s top line was down 3.9%, with comparable sales down 2.8%.

To make matters worse, the retailer’s latest guidance calls for net sales to fall by an additional 2% in 2026, marking the company’s fifth consecutive year of declining same-store sales. In short, while Kohl’s is improving its bottom line amid lower sales, investors are looking for both improved profitability and sales to stabilize.

With this in mind, it’s not surprising that, so far, Kohl’s management has ruled out the idea of further store closures in the near term. As CEO Michael Bender noted on the post-earnings conference call: “The focus for us is actually on optimizing what we already have, and we’ll be focused on making sure that we continue to push the stores’ productivity as far as we can.”

What this means for Kohl’s stock moving forward

Based on Bender’s remarks, management’s game plan seems to be to continue maximizing the potential of its brick-and-mortar store locations. Remember that Kohl’s, much like other big-box retailers, has increasingly become an omnichannel retailer. Last quarter, for instance, 35% of the company’s fourth-quarter sales were from its e-commerce platform.

Kohl’s physical store locations serve as important infrastructure for its e-commerce business. Bender also noted on the conference call that “well over 90%” of Kohl’s 1,150 physical locations remain profitable. For the remaining open stores that are unprofitable, the company may be considering its overall turnaround plan, which entails strategies such as improved inventory execution and value positioning.

If the company’s sales fail to stabilize, or better yet, improve, in the quarters ahead, Kohl’s may decide to make further trimmings to its store count. Admittedly, it’s unclear what Kohl’s still-ongoing turnaround means for the stock’s performance moving forward. Although Kohl’s is currently profitable, trading for less than 9 times forward earnings (a deep discount to other big box retail stocks), it may not be until Kohl’s reports better-than-expected sales again that the stock gets back on an upward trajectory.