Investment Thesis
Kohl's faces severe operational distress with negative free cash flow (-$158M), inability to generate operating cash flow (-$74M), and unprofitability (-0.4% net margin) despite $3.2B in revenue. Critical solvency concerns emerge from interest coverage of 0.2x and dangerously low quick ratio of 0.31x, indicating inadequate liquidity and inability to service debt from operations.
Strengths
- Modest debt leverage with Debt/Equity of 0.34x providing some balance sheet cushion
- Established asset base of $13.2B representing operational infrastructure
- Current ratio of 1.48x shows short-term liquidity is not immediately critical
Risks
- Interest coverage of 0.2x indicates company cannot cover debt obligations from operating income—insolvency risk
- Operating cash flow negative at -$74M paired with -$158M free cash flow means company is burning cash and cannot self-fund operations
- Quick ratio of 0.31x reveals severe working capital stress and inability to meet short-term obligations with liquid assets
- Net income negative (-$14M) and net margin negative (-0.4%) despite reported revenue, indicating core unprofitability
- Reported gross margin of 218.5% and revenue growth of 5491% contain mathematical anomalies raising data quality concerns
Key Metrics to Watch
- Operating cash flow trend—must turn positive to indicate operational viability
- Interest coverage ratio—must improve above 1.0x to demonstrate debt serviceability
- Quick ratio trajectory—critical threshold is 0.50x minimum; current 0.31x is unsustainable
- Free cash flow—must reach positive territory to fund capex and debt reduction
Financial Metrics
Revenue
3.2B
Net Income
-14.0M
EPS (Diluted)
$-0.13
Free Cash Flow
-158.0M
Total Assets
13.2B
Cash
429.0M
Profitability Ratios
Gross Margin
218.5%
Operating Margin
1.5%
Net Margin
-0.4%
ROE
-0.3%
ROA
-0.1%
FCF Margin
-5.0%
Balance Sheet & Liquidity
Current Ratio
1.48x
Quick Ratio
0.31x
Debt/Equity
0.34x
Debt/Assets
0.0%
Interest Coverage
0.15x
Long-term Debt
1.4B
Disclaimer: This analysis is generated by AI based on publicly available SEC EDGAR filings.
It does not include stock price data and should not be considered financial advice.
All fundamental data is sourced from SEC public domain filings.
Always conduct your own research before making investment decisions.
Data Source: SEC EDGAR |
Analysis Date: 2026-06-05T07:36:08.265812 |
Data as of: 2026-05-02 |
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