Kohl’s Corp. posted stronger-than-expected fiscal second-quarter results and narrowed its full-year guidance, sending the shares up as much as 27% in pre-market New York trading. The Wisconsin-based department-store chain reported adjusted earnings of $0.56 a share, nearly double analysts’ forecasts, while revenue of $3.35 billion also beat estimates despite another year-over-year sales decline. Including a $129 million gain from a credit-card interchange fee settlement, GAAP earnings rose to $1.35 a share on net income of $153 million, compared with $0.59 a share a year earlier. Net sales fell 5.1% and comparable sales slid 4.2%, but gross margin improved by 28 basis points to 39.9% as the company lowered inventory levels and operating expenses. Encouraged by the margin gains, Kohl’s now expects full-year net sales to contract by 5% to 6%, the higher end of its previous range, and sees an adjusted operating margin of 2.5% to 2.7%, up from 2.2% to 2.6%. Adjusted earnings are projected at $0.50 to $0.80 a share. Interim Chief Executive Officer Michael Bender said the figures show progress on the retailer’s 2025 turnaround plan, highlighting better traction with higher-income shoppers, reduced inventory and expense controls. The outlook boost comes as the stock remains heavily shorted—about 31% of freely traded shares, according to ORTEX data—amplifying the share price reaction to the surprise profit. While management cautioned that lower- and middle-income customers continue to trade down, it said initiatives such as expanded Sephora shop-in-shops and more exclusive merchandise should sustain momentum through the rest of the year.