Good morning. Kohl’s is gaining momentum in its turnaround after a period of CEO turnover, while longtime finance chief Jill Timm has been a mainstay.
The retailer reported on Wednesday Q2 2025 adjusted earnings per share (EPS) of $0.56, beating the $0.30 estimate, driven by cost controls and margin improvements, and sending shares up over 20% despite a 5.1% drop in net sales. Proprietary brands and the Sephora partnership showed positive growth.
Following years of weak sales, the better-than-expected earnings follow a tumultuous period, my Fortune colleague Sydney Lake writes. CEO Ashley Buchanan was fired in May—just over 100 days into the role—after an investigation found he directed the company to do business with a vendor who was his romantic partner, under highly unusual terms favorable to the vendor. Former board chair Michael Bender is now serving as interim CEO while the company searches for a permanent replacement.
When Buchanan joined the company in January as chief executive, he succeeded Tom Kingsbury, who had followed Michelle Gass after she stepped down as CEO in December 2022 to become chief executive at Levi’s.
Working toward a turnaround
Timm has been with Kohl’s since 1999 and became finance chief in 2019, having previously held various finance leadership roles, including VP of financial planning and analysis and EVP of finance.
“As Timm has been around through multiple CEO changes, she provides stability at a company that has lacked it,” David Swartz, senior equity analyst at Morningstar, told me, though he added that a new CEO could insist on making executive changes.
Swartz also said Kohl’s needs a CEO with long-term vision and experience in retail and apparel. “It hasn’t really had this in years,” he said, emphasizing the need for a strategic plan for real estate and greater adaptability to competitive threats. “Obviously, the board and its search firm need to do a much better job than it did with Ashley Buchanan, which was a disaster,” he said.
Kohl’s outperformed Morningstar’s expectations on EPS, margin, and comparable sales, with shares still “very undervalued” versus Morningstar’s estimates of $40 fair value. Modest Q2 gains have not changed Swartz’s long-term forecast for 1% comparable sales growth and 5% operating margins.
Kohl’s turnaround centers on rebuilding proprietary brands, simplifying promotions, improving the omnichannel experience, and regaining its reputation for value and quality.
On the earnings call, Timm stressed Kohl’s continued focus on value: “We’re also navigating a lot of uncertainty in the macro environment, and we know our consumer, particularly the middle- and lower-income customer, remains under pressure, and so we’re going to have to fight for every dollar in the back half.”
Sheryl Estrada
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Fortune 500 Power Moves
Singer most recently served as partner and chief operating officer of ValueAct Capital before retiring in 2021, during which time he also served on the boards of Rolls-Royce Holdings and Motorola Solutions. Prior to joining ValueAct Capital in 2012, Singer was the CFO of Discovery Communications, where he played a key role in taking the company public in 2008, as well as the CFO and treasurer of American Tower Corporation. Before that, Singer was an investment banker at Goldman Sachs. Singer is a current board member of Warby Parker and Sweetgreen.
Every Friday morning, the weekly Fortune 500 Power Moves column tracks Fortune 500 company C-suite shifts—see the most recent edition.
Big Deal
“The 3:30 a.m. club” is an interesting article by advisory firm Korn Ferry. It discusses how 15% of workers’ circadian rhythms, known as chronotypes, lead them to do their best work in the early morning hours.
According to Korn Ferry: “Some are extreme early risers, sometimes called ‘larks,’ who naturally wake up at 3 a.m. or even earlier, while others are still awake from the previous evening, not hitting the hay until 4 a.m. or 5 a.m. These larks and owls speak rapturously about the calm of night, when there are no ringing phones or crying kids or pressing errands, and they are able to do their best work.”
However, despite constituting more than one in ten workers, it’s a lifestyle at odds with corporate norms.
Going deeper
Fortune 500: Titans and Disruptors of Industry, a new vodcast hosted by Fortune’s Editor in Chief Alyson Shontell, made its debut this morning. Watch the first episode with Accenture CEO Julie Sweet here.
Overheard
“This quarter and outlook from Nvidia is a further validation data point for the AI Revolution.”
—Wedbush Securities analysts wrote in an industry note on Wednesday evening. Nvidia beat Wall Street’s earnings expectations on Wednesday, reporting $46.74 billion in revenue, a 56% year-over-year increase. However, with no sales of its H20 chips to China, the stock fell after the earnings call, Fortune reported.
