Kohl's Has an AI Shopping Assistant Driving Higher Conversion
"We are confident that the work we are executing is leading us in the right direction."
Kohl's reported Q2 2026 results on August 26, showing net sales of $3.32 billion, down 0.9% year over year, and disclosed that a new AI shopping assistant is delivering stronger conversion and higher revenue per visit as part of the company's ongoing turnaround.
Kohl's investor presentation described the tool as part of "early progress from agentic commerce." The AI shopping assistant sits alongside a broader set of turnaround initiatives Kohl's is executing simultaneously, according to the company.
A revamped back-to-school presentation focuses on Nike, Levi's, and opening-price private brands. In-store signage and mannequin density have been improved.
Merchandising has been simplified to concentrate on fewer, better-selling brands carried in greater depth. Same-day delivery has been expanded through Instacart and DoorDash partnerships. A new Klarna partnership ahead of the holiday season will add flexible payment options at checkout.
Net sales declined 0.9% and comparable sales declined 0.9%, the seventh consecutive quarter of comparable sales decline for Kohl's.
The gross margin improvement of 305 basis points to 43.0% was significantly influenced by the approximately $150 million in IEEPA tariff refunds received during the quarter, of which approximately $100 million flowed through cost of merchandise sold. Excluding that benefit, the underlying gross margin trajectory is more moderate.
The tariff refund also drove the significant raise in full-year guidance, adjusted EPS guidance moved to $1.80-$2.40 from $1.00-$1.60, an improvement that reflects the one-time refund benefit rather than exclusively the company's underlying operational momentum.
Kohl's acknowledged that approximately $40 million in additional tariff refunds are expected to be received. The company operates more than 1,100 stores in 49 states.
"We are confident that the work we are executing is leading us in the right direction," said Michael Bender, CEO of Kohl's. "Our second quarter results reflect the ongoing progress against our initiatives, leading to another improvement in our comparable sales trend."
Key Takeaways
- Kohl's AI shopping assistant boosts conversion rates and revenue per visit amid ongoing turnaround efforts.
- Q2 2026 net sales decreased by 0.9%, totaling $3.32 billion.
- Revamped merchandising emphasizes fewer, high-performing brands while enhancing store presentation.
- Expanded same-day delivery options through partnerships with Instacart and DoorDash improve customer convenience.
- Kohl's continues to implement multiple initiatives to strengthen its market position.