Kohl’s turnaround offers Big Lots workers a roadmap for recovery

A turnaround that finally has a number behind it

Kohl’s just gave troubled retailers a useful proof point. The chain said first-quarter fiscal 2026 net sales fell 1.7% and comparable sales fell 1.1% for the quarter ended May 2, 2026, but that same 1.1% comp decline was its best quarterly comparable-sales performance in more than four years. Gross margin improved by 4 basis points, the company posted a diluted loss per share of ($0.13), and management still reaffirmed its full-year outlook. Reuters framed the result as a sign that turnaround efforts under CEO Michael Bender are starting to pay off, while CNBC reported that Kohl’s stock jumped 20% after the release.

That combination matters because it shows how a retailer can stop looking like a problem case and start looking like a work in progress. For Big Lots employees and operators, the signal is not that the recovery is easy. It is that better inventory control, cleaner execution, and a steadier read on customer demand can change the tone around a company long before every headline turns positive.

What Kohl’s improved first

The most important part of Kohl’s report is not that sales grew sharply. They did not. The more relevant change is that the business began to move in the right direction on several fronts at once: sales decline eased, margin improved, and leadership held firm on the year ahead. Kohl’s reaffirmed full-year 2026 guidance for net sales and comparable sales to decline 2% to flat, adjusted operating margin to run between 2.8% and 3.4%, adjusted diluted EPS to range from $1.00 to $1.60, and capital spending to land between $350 million and $400 million.

That matters in a turnaround because workers feel the difference when management has a plan it can repeat consistently. Stores do not need perfection to stabilize. They need cleaner assortments, fewer inventory mistakes, and a clearer daily playbook so associates are not constantly fighting out-of-stock gaps, overstuffed back rooms, or broken promotional plans. The Kohl’s results suggest those basics are finally lining up well enough to improve confidence with investors, vendors, and the operating teams trying to execute inside the stores.

The Michael Bender playbook is about fundamentals, not flash

Trade coverage said Bender pointed to proprietary brands, Kohl’s Card customers, and inventory adjustments as key drivers of the improvement. Reuters reported that the company’s turnaround effort was beginning to pay off, and Bender said Kohl’s was “knocking on the door of growth.” He also told CNBC, “We’re not done.” Those lines matter because they describe a recovery that is still fragile but no longer theoretical.

For Big Lots, the transferable part of that playbook is the discipline itself. If a retailer can better match inventory to demand, tighten expenses, and focus on the categories that keep customers coming back, it can change its trajectory without waiting for a miracle. That is especially true in value retail, where shoppers notice fast when shelves are empty, price architecture is confusing, or stores feel disorganized. Kohl’s is showing that even when revenue is still under pressure, operational credibility can improve enough to buy time.

What Big Lots can actually copy, and what it cannot

Some parts of the Kohl’s turnaround are realistic for Big Lots. Inventory discipline is the big one. Cleaner inventory means fewer markdown surprises, fewer fulfillment headaches, and more confidence on the sales floor. Better merchandising is another transferable piece: stores that present a clearer value story can make it easier for workers to sell, restock, and explain the assortment to customers.

Customer data is also a meaningful lesson. Kohl’s emphasis on its cardholders shows the value of understanding which customers are most loyal, what they buy, and when they come back. Big Lots can use that kind of insight to sharpen assortments and promotions, even if its customer base and loyalty structure are different. The goal is the same: give store teams a clearer target rather than asking them to guess what sells.

But some parts of Kohl’s situation are harder for Big Lots to match. Kohl’s is still a larger operator with a more established balance sheet and enough scale to support a meaningful capital budget, a continuing dividend, and a guided path for the year. The company said cash rose and borrowings under its revolving credit facility fell, which helps reassure investors and vendors. Big Lots may not have that same cushion, which means it could have less room for trial and error, fewer resources for store investment, and less flexibility if sales wobble.

Why the balance sheet signal matters on the sales floor

Kohl’s said its balance sheet improved as cash rose and revolving borrowings fell. That is not just an investor talking point. When lenders, vendors, and landlords see a retailer gaining financial stability, they often respond with more confidence in terms, inventory flow, and partnership decisions. That can affect everything from how well stores stay stocked to how much pressure field teams feel to do more with less.

For Big Lots workers, this is one of the most practical lessons in the Kohl’s report: financial steadiness is operational support. A healthier balance sheet can make it easier to get the right product into stores on time and reduce the chaos that hits store teams when supply is inconsistent. If Big Lots can demonstrate the same kind of discipline, even at a smaller scale, it may find that the recovery feels less like crisis management and more like routine retail.

The comparison with Big Lots is really about credibility

Kohl’s is not declaring victory. Its own numbers still show declines in sales, and the company is guiding for another year of pressure. But the difference between a retailer that looks stuck and one that looks repairable often comes down to whether the numbers start improving together. In this case, lower declines, better margins, and a reaffirmed outlook all point in the same direction.

That is the useful frame for Big Lots. The chain does not need to copy Kohl’s size or spending power to learn from the turnaround. It needs the operational habits that make recovery believable: disciplined inventory, tighter expense control, stronger merchandising, and a better read on loyal customers. Kohl’s is showing that those moves can rebuild trust with the market. For Big Lots, they may be the difference between a temporary rebound and a lasting fix.