1、North America Credit Research27 August 2025J P M O R G A NNeutralKSSMoodys:B2Outlook:STABLES&P:BB-Outlook:NEGFitch:BBB-Outlook:SThe above agency ratings are at the corporate levelNorth America Corporate Credit-Consumer,Retailing,and Food&BeverageCarla Casella,CFA AC(1-212)270-Yaakov Musheyev(1-212)8

2、34 Morgan Morrissey(1-212)834-J.P.Morgan Securities LLCKohls(KSS)posted solid 2Q25 results and raised the bottom-end of its FY25 guidance.Bonds were up 4 points on the day(2 points of that were retracing pressure from Tuesday on negative press).We would stay Neutral KSS after this weeks dip and rebo

3、und.The secured notes are back to 10%.The upside risk to our rating is better-than-expected performance or if KSS uses FCF to take out(or buy back)bonds;the downside risk to our rating is greater-than-expected tariff pressure or consumer weakness.The Press,vendors and payables:This week,Bloomberg re

4、ported that KSS is asking some vendors for more time to settle invoices.The story stems from a March 25 letter the company sent to suppliers about“standardizing payment terms in line with the retail industry at large.”This weeks earnings showed no material change in payment terms for 2Q(May-Jul),as

5、days payable declined from 49 days last year to 45 days this year.KSS payable days are slightly tighter than its peers,implying it may have a modest opportunity to lengthen payables by a few days to help working capital 5 days extension would improve WC cash flow by$125mn but we are not building thi

6、s into our forecast.We expect payable days to optically tighten(across retail)this year because of tariffs as tariff payments increase inventory costs(and therefore inventory on the books),but the duty payments are made upfront,while the payment for the goods is made on payable terms.Well be trackin