Question · Q2 2025
Jacquelyn Wang, on for Michael Binetti, questioned the drivers of increased margin leverage in the updated guidance despite lower sales, its durability, and the specific impact of excluding the CFPB late fee rule from the 2024 outlook.
Answer
CFO Jill Timm explained that the improved margin outlook is driven by disciplined inventory management, which has consistently exceeded targets, and tight SG&A expense control. This provides flexibility to remain competitive in an expectedly promotional holiday season. Regarding the CFPB rule, she clarified that its exclusion from guidance means the 'other revenue' line is now forecast to be down mid-single digits for the full year, aligning the back half's performance with the front half's, thereby removing a previously anticipated headwind.
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