Kohl’s has a broad retail presence with over 1,100 stores across the U.S. Over the years, the company has been the subject of buyout talks, activist investor pressure, and bankruptcy rumors. However, it has struggled to stay competitive in a retail world increasingly dominated by e-commerce giants and discount retailers.
Many analysts are skeptical of the stock’s recent surge. “There’s a lot of irrational exuberance surrounding the stock,” said Neil Saunders, Managing Director at GlobalData. “It’s very reminiscent of what we observed with Bed Bath & Beyond.” He added that Kohl’s hasn’t made any major changes to its business model or performance to justify such a sharp increase. This suggests that the rally is driven more by speculation than by solid business fundamentals.
A lot of that speculation appears to be fueled by online forums like Reddit’s Wall Street Bets. This community played a major role in the GameStop short squeeze in 2021. Some users have tagged Kohl’s as a short squeeze candidate due to its high short interest and its strong name recognition among retail investors.
In short selling, when a stock price rises unexpectedly, investors who bet against it often buy back shares to avoid larger losses. This buying pressure can cause the price to spike even further. The phenomenon is known as a short squeeze.
Despite the excitement, Kohl’s core business faces serious challenges. It continues to experience falling sales, intense competition, and uncertain leadership. The company is currently being led by an interim CEO, following the exit of Ashley Buchanan over a conflict of interest scandal.
In May 2025, Kohl’s forecasted a 5% to 7% drop in annual sales, with comparable store sales projected to fall between 4% and 6%.
While Tuesday’s stock surge brought a wave of enthusiasm, analysts warn investors not to overlook the retailer’s deeper financial problems. The rally, they say, appears more emotional than rational.
Reddit Buzz, Short Interest, and Weak Fundamentals Fuel Speculation
Kohl’s operates a large retail network, with over 1,100 stores across the United States. Over time, the company has been involved in buyout discussions, activist investor campaigns, and bankruptcy speculation. Despite its size, Kohl’s has struggled to stay competitive in a fast-changing retail market. The industry is now dominated by e-commerce leaders and discount chains, making it difficult for traditional retailers to keep up.
Market analysts remain cautious about the recent stock rally. “There’s a lot of irrational exuberance surrounding the stock,” said Neil Saunders, Managing Director at GlobalData. “It’s very reminiscent of what we observed with Bed Bath & Beyond,” he added. According to Saunders, Kohl’s hasn’t shown any meaningful changes in strategy or performance to justify the surge. This suggests the recent rise is driven more by emotion than business fundamentals.
A large part of the excitement is coming from online communities like Reddit’s Wall Street Bets. This forum was instrumental in the GameStop short squeeze back in 2021. Now, Reddit users are calling Kohl’s a potential short squeeze candidate. The reasoning: high short interest and strong brand recognition among retail investors.
Short squeezes occur when heavily shorted stocks suddenly rise in price. Investors betting against the stock must buy back shares to limit losses. That buying pressure pushes prices even higher, fueling further momentum.
Despite the stock’s rise, Kohl’s faces several major challenges. Sales have been declining, competition is increasing, and leadership remains uncertain. The company is currently led by an interim CEO, following the departure of Ashley Buchanan. Buchanan was removed due to a conflict of interest scandal that raised concerns about corporate governance.
In May 2025, Kohl’s issued financial guidance for the fiscal year. It projected a 5% to 7% drop in net sales and a 4% to 6% decline in comparable store sales.
Although Tuesday’s rally sparked renewed interest, analysts urge caution. Many believe the stock surge is emotional rather than grounded in real business improvements. Investors are advised to consider the company’s long-term fundamentals before joining the meme-stock hype.
