What the changes say
- Kohl's expanded disclosures on tariff volatility, tax exposure, and AI implementation risks.
What changed since the prior 10-K
New
- NewMacroeconomic, Regulatory, Legal, and External Risks
Geopolitical instability, hostilities, and public health events could adversely affect consumer behavior and our operations
Geopolitical instability, hostilities, and public health events could disrupt supply chains and lower consumer spending.
- NewMacroeconomic, Regulatory, Legal, and External Risks
Changes in global trade policies and the imposition of tariffs could increase our costs and disrupt our supply chain
New tariffs or changes in global trade policies could increase merchandise costs for goods sourced outside the U.S.
- NewMacroeconomic, Regulatory, Legal, and External Risks
We are subject to income and other taxes in the United States and various local jurisdictions, and changes in tax laws or the interpretation of existing laws could increase our tax liabilities and impact our financial results
Tax law changes or adverse audit rulings by federal, state, or local authorities could increase our effective tax rate.
- NewMacroeconomic, Regulatory, Legal, and External Risks
Evolving regulations related to ESG, climate change, and sustainability could increase our costs and impose operational restrictions
Evolving ESG regulations regarding packaging waste and PFAS in merchandise could increase compliance costs and operational restrictions.
- NewStrategic, Competitive, and Operational Risks
Our marketing and loyalty programs may be ineffective at building personalized connections with customers
Ineffective marketing and loyalty programs could fail to build personalized connections or drive customer traffic.
- NewStrategic, Competitive, and Operational Risks
risks and opportunities, and our failure, or perceived failure, to meet evolving investor and other stakeholder expectations; and (d) various other forms of adverse publicity, especially in social media outlets
Failure to meet evolving stakeholder expectations or negative social media publicity regarding our ESG profile could harm our brand.
- NewStrategic, Competitive, and Operational Risks
Our information technology projects may not yield their intended results, and our use of artificial intelligence and machine learning technology presents evolving operational and legal risks
Information technology projects and the integration of artificial intelligence and machine learning present evolving operational and legal risks.
- NewStrategic, Competitive, and Operational Risks
manner. Both the increased cost and lower availability of merchandise, raw materials, fuel, and labor may also have an adverse impact on our cash and working capital needs as well as those of our suppliers
Vendor bankruptcy or insolvency could leave us unable to arrange replacement contracts on equally favorable terms.
- NewStrategic, Competitive, and Operational Risks
favorable terms and on a timely basis (if at all). The terms of current and future debt agreements could restrict our business operations or cause future financing to be unavailable due to our covenant restrictions then in effect
Restrictive covenants in our revolving credit facility could cause a default or restrict our business operations.
- NewStrategic, Competitive, and Operational Risks
Our capital allocation strategy may be inefficient, may not yield the anticipated returns, or may not effectively support our long-term growth
Inefficient capital allocation or failure of investments to deliver expected returns could reduce our competitive position.
Dropped
- DroppedMacroeconomic, Regulatory, Legal, and External Risks
Consumer confidence is also affected by the domestic and international political environment. The outbreak or escalation of war, or the occurrence of terrorist acts or other hostilities in or affecting the United States, could lead to a decrease in spending by consumers
- DroppedMacroeconomic, Regulatory, Legal, and External Risks
Tax, trade, and climate and other ESG-related policies and regulations could change or be implemented and adversely affect our business and results of operations
Consumer confidence affected by war, terrorism, and future pandemics like COVID-19.
- DroppedStrategic, Competitive, and Operational Risks
Our marketing may be ineffective
Uncertainty with respect to tax and trade policies and tariffs.
- DroppedStrategic, Competitive, and Operational Risks
Our information technology projects may not yield their intended results
- DroppedStrategic, Competitive, and Operational Risks
Our capital allocation could be inefficient or ineffective
Reworded
- 86% rewrittenStrategic, Competitive, and Operational Risks
The reputation and brand image of Kohl’s and the brands and products we sell could be damaged
Removed specific reference to ESG voluntary initiatives and disclosures from the brand reputation risk factor.
- 77% rewrittenMacroeconomic, Regulatory, Legal, and External Risks
Our business is highly sensitive to general economic conditions, consumer spending levels, and/or other external conditions, which could decline
Added explicit mention that increased costs of basic necessities like food, fuel, and healthcare cause core moderate-income customers to reduce discretionary spending.
Was: General economic conditions, consumer spending levels, and/or other conditions could decline
- 75% rewrittenMacroeconomic, Regulatory, Legal, and External Risks
Weather conditions, natural disasters, and the potential impacts of climate change could adversely affect consumer shopping patterns and disrupt our operations
Clarified that severe weather and natural disasters can physically damage or close Kohl's stores and distribution centers.
Was: Weather conditions and natural disasters could adversely affect consumer shopping patterns and disrupt our operations
- 57% rewrittenStrategic, Competitive, and Operational Risks
We may be unable to raise additional capital or maintain credit on favorable terms, which could constrain our operational flexibility and increase our cost of doing business
Added seasonal working capital needs and strategic initiatives to the uses of capital funded by debt and credit lines.
Was: We may be unable to raise additional capital or maintain bank credit on favorable terms, which could adversely affect our business and financial condition
- 53% rewrittenStrategic, Competitive, and Operational Risks
We may be unable to offer merchandise that resonates with existing customers and attracts new customers while successfully managing our inventory levels
Expanded inventory risk to include simultaneous lack of stock in high-demand categories and excess inventory in others.
Was: We may be unable to offer merchandise that resonates with existing customers and attracts new customers as well as successfully manage our inventory levels
- 51% rewrittenStrategic, Competitive, and Operational Risks
We are subject to payment-related risks, including in our credit card operations, that could adversely affect our sales, revenues, and/or profitability, increase our operating costs, expose us to fraud or theft, and subject us to potential liability
Added that the profitability of the Kohl's credit card program is sensitive to the economic health of core moderate-income customers.
- 51% rewrittenStrategic, Competitive, and Operational Risks
We may be unable to successfully execute our omnichannel strategy
Refined omnichannel strategy risk to emphasize seamless integration of physical and digital channels for a frictionless shopping experience.
Was: We may be unable to successfully execute an omnichannel strategy
- 43% rewrittenStrategic, Competitive, and Operational Risks
We may be unable to source merchandise in a timely and cost-effective manner
Added specific mention of port strikes, port congestion, transport capacity constraints, and rising freight costs impacting ocean-shipped merchandise.
- 26% rewrittenStrategic, Competitive, and Operational Risks
We may be unable to adequately maintain and/or update our information systems
All 26 risk factors
Headings as the filing states them, in filing order.
Macroeconomic, Regulatory, Legal, and External Risks
- 01Our business is highly sensitive to general economic conditions, consumer spending levels, and/or other external conditions, which could decline77% rewritten
- 02Geopolitical instability, hostilities, and public health events could adversely affect consumer behavior and our operationsNew
- 03Changes in global trade policies and the imposition of tariffs could increase our costs and disrupt our supply chainNew
- 04We are subject to income and other taxes in the United States and various local jurisdictions, and changes in tax laws or the interpretation of existing laws could increase our tax liabilities and impact our financial resultsNew
- 05Evolving regulations related to ESG, climate change, and sustainability could increase our costs and impose operational restrictionsNew
- 06Regulatory and legal matters could adversely affect our business operations and change financial performance
- 07Weather conditions, natural disasters, and the potential impacts of climate change could adversely affect consumer shopping patterns and disrupt our operations75% rewritten
Strategic, Competitive, and Operational Risks
- 08We may be unable to successfully execute our omnichannel strategy51% rewritten
- 09We may be unable to offer merchandise that resonates with existing customers and attracts new customers while successfully managing our inventory levels53% rewritten
- 10Our competitors could make changes to their pricing and other practices
- 11Our marketing and loyalty programs may be ineffective at building personalized connections with customersNew
- 12Our business is subject to seasonal influences, with a major portion of sales and income historically realized during the second half of the fiscal year, which includes the back-to-school and holiday seasons
- 13The reputation and brand image of Kohl’s and the brands and products we sell could be damaged86% rewritten
- 14risks and opportunities, and our failure, or perceived failure, to meet evolving investor and other stakeholder expectations; and (d) various other forms of adverse publicity, especially in social media outletsNew
- 15We are subject to payment-related risks, including in our credit card operations, that could adversely affect our sales, revenues, and/or profitability, increase our operating costs, expose us to fraud or theft, and subject us to potential liability51% rewritten
- 16We may be unable to attract, develop, and retain quality associates while controlling costs, which could adversely affect our operating results
- 17We may be unable to adequately maintain and/or update our information systems26% rewritten
- 18Our efforts to protect the privacy and security of sensitive or confidential customer, associate, or company information could be unsuccessful, which could severely damage our reputation, expose us to risks of litigation and liability, disrupt our operations, and harm our business
- 19Our information technology projects may not yield their intended results, and our use of artificial intelligence and machine learning technology presents evolving operational and legal risksNew
- 20We may be unable to source merchandise in a timely and cost-effective manner43% rewritten
- 21manner. Both the increased cost and lower availability of merchandise, raw materials, fuel, and labor may also have an adverse impact on our cash and working capital needs as well as those of our suppliersNew
- 22Our vendors may not adhere to our Terms of Engagement or to applicable laws
- 23There may be concerns about the safety of products that we sell
- 24We may be unable to raise additional capital or maintain credit on favorable terms, which could constrain our operational flexibility and increase our cost of doing business57% rewritten
- 25favorable terms and on a timely basis (if at all). The terms of current and future debt agreements could restrict our business operations or cause future financing to be unavailable due to our covenant restrictions then in effectNew
- 26Our capital allocation strategy may be inefficient, may not yield the anticipated returns, or may not effectively support our long-term growthNew
Other Kohl's 10-Ks
- FY2025 10-K risk factors21 risks
Retail inventory management and consumer demand shifts dominate risk factors.
Filed Mar 20, 2025
About this page
The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.