Kohl’s stock experienced a significant rally on Thursday, climbing 20% during morning trading after the retailer announced its most impressive comparable sales growth in four years. Despite a slight decline in overall revenue, the company managed to outperform Wall Street expectations for both its top and bottom lines, signaling a potential turnaround for the struggling department store chain.

For the fiscal first quarter ending May 2, Kohl’s reported net sales of $3 billion, narrowly beating analyst projections. While the company posted a net loss of $14 million, or 13 cents per share, this performance remained consistent with the previous year’s results. CEO Michael Bender emphasized that the company is operating with increased discipline, citing cleaner inventory levels and a robust balance sheet as key drivers of the recent momentum. He noted that the business is currently “knocking on the door of growth” as it works to regain lost market share.

Looking ahead, the retailer has reaffirmed its full-year financial guidance, projecting net and comparable sales to range between a 2% decline and flat growth. Management remains cautious, however, acknowledging that the company’s core demographic of middle- and lower-income shoppers continues to face significant pressure from persistent inflation and rising energy costs. To combat these headwinds, Kohl’s is focusing on enhancing the in-store shopping experience and emphasizing value to attract budget-conscious consumers.

Beyond its retail operations, the company is also pursuing financial recovery through administrative channels, confirming it has applied for approximately $190 million in tariff refunds. While these funds have not yet been received, the potential influx of capital represents a notable development for the firm as it navigates a challenging macroeconomic environment. Despite a difficult start to the year that saw shares drop over 35%, this latest quarterly update has provided investors with a renewed sense of optimism regarding the company’s long-term trajectory.