Operating Margin - Kohls Corp (NYSE:KSS)

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Price: 22.95 USD 3.47%

Market Cap: 2.6B USD

3.2%

Current

Average

3.1%

Industry

Operating Margin represents how efficiently a company is able to generate profit through its core operations.

Higher ratios are generally better, illustrating the company is efficient in its operations and is good at turning sales into profits.

Operating Margin

3.2%

Operating Profit

500m

Revenue

15.8B

Operating Margin Across Competitors

Country		Company	Market Cap	Operating Margin
US		Kohls Corp NYSE:KSS	2.6B USD	3%
ZA	W	Woolworths Holdings Ltd JSE:WHL	49.9B Zac	6%
UK		Next PLC LSE:NXT	16.5B GBP	18%
US		Dillard's Inc NYSE:DDS	10.2B USD	11%
MX		El Puerto de Liverpool SAB de CV BMV:LIVEPOLC-1	136.3B MXN	13%
CN	C	CCOOP Group Co Ltd SZSE:000564	48B CNY	-17%
US		Macy's Inc NYSE:M	6.1B USD	4%
JP		Isetan Mitsukoshi Holdings Ltd TSE:3099	838.9B JPY	13%
US		Nordstrom Inc NYSE:JWN	4.1B USD	3%
JP	J	J.Front Retailing Co Ltd TSE:3086	565.5B JPY	11%
JP		Takashimaya Co Ltd TSE:8233	494.6B JPY	11%

Kohls Corp
Glance View

Economic Moat

None

Market Cap

2.6B USD

Industry

Retail

Kohl's Corporation, a staple in American retail, traces its roots back to the humble beginnings of a single supermarket in Milwaukee in 1946. Over the decades, it has evolved into a formidable department store chain, tapping into suburban shopping habits to provide a convenient and localized retail experience. At the heart of Kohl's business model is its "off-mall" strategy, where most of its stores are situated in standalone locations or strip malls, setting it apart from many of its department store competitors that are predominantly anchored in traditional indoor malls. This positioning allows Kohl’s to offer a mix of high-quality national brands and exclusive private labels across clothing, footwear, and home products, catering to a broad demographic that seeks value and convenience in their shopping experiences. By focusing on known brands like Levi’s and Nike, coupled with its own brands like Sonoma Goods for Life and Croft & Barrow, Kohl's aims to attract a diverse customer base looking for a balance of style, quality, and affordability. Kohl's revenue generation revolves around its adept use of continuous promotional discounting strategies and robust loyalty rewards programs. These customer-focused initiatives encourage repeat business and delve deep into data analytics to personalize shopping experiences. Central to its financial strategy is the Kohl's Cash program, which incentivizes purchases by offering redeemable cash-back certificates, a method that effectively drives both initial sales and follow-up transactions. Additionally, Kohl's has undertaken initiatives to bolster its e-commerce presence and omni-channel capabilities, such as in-store pickups and an easy returns process for online purchases. This synergy between physical and digital retail channels is crucial in the retailer’s effort to compete with online giants and adapt to evolving consumer behaviors. With a savvy blend of real estate strategy, merchandise offerings, and innovative customer engagement tactics, Kohl's strives to maintain its foothold as a key player in the retail sector amidst the industry's dynamic landscape.

View KSS Analysis

KSS Intrinsic Value

What is Intrinsic Value?

Economic Moat is a concept popularized by Warren Buffett to describe a company's durable competitive advantage. It represents the 'moat' that protects a company from competitors and helps it sustain profitability over the long term. Our analysis of the past 10 years showed that companies with a wide economic moat significantly outperformed the market, delivering +645% returns compared to +189% for the S&P 500.

Our research into Economic Moat performance spans the past 10 years and focuses on companies with a wide economic moat. For this analysis, we calculated the average stock price returns of these companies, comparing them to the performance of the S&P 500 index over the same period.

The results were compelling: wide moat stocks achieved a remarkable +645% average return, compared to +188% for the broader market. This difference highlights the long-term benefits of investing in businesses that can maintain their market position and pricing power over time.

Note: This research does not account for survivorship bias. Past performance is not indicative of future results.

Determining whether a company has an economic moat requires both a deep dive into financial metrics and a qualitative assessment of its competitive position. Our analysts conduct a rigorous evaluation that focuses on identifying structural advantages that enable a company to sustain profitability and defend its market share over the long term.

The process begins with an analysis of a company’s historical financial performance. We assess how consistently the company has generated returns above its cost of capital and whether those returns have been stable or improving. However, financial performance alone doesn’t reveal the full picture. To understand the sources of these advantages, we evaluate five key drivers of economic moats:

Network Effect: We analyze whether the value of a company’s product or service grows as its user base expands. Platforms like payment systems or marketplaces benefit from this self-reinforcing.

Switching Costs: We assess whether customers face significant costs or disruptions when switching to a competitor’s product or service. High switching costs create customer stickiness and provide pricing power.

Intangible Assets: Strong brands, patents, and regulatory licenses can protect a company’s market position by creating barriers for competitors or enabling premium pricing. For example, a well-recognized consumer brand may command higher customer loyalty and margins.

Efficient scale: Occurs when a market is optimally served by one or a few players, making it unprofitable for new entrants to compete. This typically happens in industries with high fixed costs or geographic constraints, such as utilities or pipelines.

Cost Advantage: Companies with structural cost advantages can produce goods or services at a lower cost than their competitors, enabling them to offer competitive pricing or maintain higher margins. These advantages often arise from economies of scale, superior supply chain management, or proprietary technology. Firms like Walmart leverage their massive scale to negotiate better terms with suppliers, allowing them to undercut competitors on price.

By examining these factors in combination with a company’s financial performance and market positioning, we classify each company into one of three categories:

This rigorous evaluation ensures that our moat ratings are both comprehensive and reliable, giving investors the tools they need to make well-informed, long-term decisions.

The AI Assistant may sometimes provide inaccurate information.

Make your own investment decisions or consult a licensed financial advisor.

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Kohls Corp
NYSE:KSS