00:00So, Mary, I look at Kohl's results and, yes, better than expected numbers, and it has boosted its full year outlook as well.
00:06But the direction of sales is still negative.
00:09They're decelerating, right?
00:11The numbers, the negative numbers are getting smaller, but we're still looking at 15 straight quarters of falling year over year revenue at Kohl's.
00:19You're absolutely right, Scarlett.
00:21And that's that's really important to note that because we're not saying that, hey, they're going to be getting their sales back.
00:27But we we are seeing signs that they could reach stability in the fourth quarter.
00:32So we actually think where they're guiding for comp sales decline in the fourth quarter.
00:38And if you look at consensus estimates, it's down four point six.
00:41We think they could actually come in flat.
00:43And that's because we saw October comp sales turn up one percent.
00:48But remember, they're cycling three years of comp sales declines in the fourth quarter.
00:54So they still have a tough road ahead.
00:57And the other thing to note is that their loyal customer, which is the credit card customer, well, they were down double digits in sales in the second quarter.
01:05They did improve, but they were still down high single digits in the third quarter.
01:09Yeah.
01:09So they expect that to improve further with some of their initiatives, some of the promotions that they're offering.
01:14But, yes, they still have, you know, a tough road to head.
01:18And what's helping them on the cash side is their inventories are lower year over year.
01:23And that's helping to boost their cash position.
01:26OK, so they're managing their inventory, which is what all retailers aim to do, but especially those that are struggling to put a turnaround plan in place.
01:33The interim CEO, Michael Bender, was named the permanent CEO.
01:36How much credit does he deserve for this latest results?
01:41Well, you know, when you think about it, he's doing blocking and tackling here.
01:45He basically brought back private brands because that's what really resonated with their customer.
01:49And that mix is also helping their margin at the same time, which is helping to offset any effects from tariffs, although they do see some headwinds early in 2026 from those tariffs because private brands are becoming a bigger piece of their sales now that they've brought it back.
02:08But they're resonating and they're seeing strong increases in those private brand sales.
02:13So that's really helping because those are the open price points that their low income consumer has been looking for.
02:21So it's really resonating.
02:22And that's why you're seeing the strength there.
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