Turnaround efforts at Kohl’s, after months and months of work, appear to be starting to pay off.

On Wednesday, Kohl’s reported second-quarter margin gains, expense reductions and merchandise improvements, and lifted its profit forecast for 2025, though there were still sales declines.

Net income at the Menomonee Falls, Wisc.-based family-oriented value chain rose to $153 million in the quarter ended Aug. 2, from $66 million in the year-ago quarter. Adjusted net income last quarter slipped to $64 million, or $0.56 per diluted share, from $66 million, or $0.59 per diluted share, in the year-ago quarter.

Net sales decreased 5.1 percent to $3.35 billion last quarter compared to $3.53 billion in the year-ago period. Comparable sales declined 4.2 percent.

Gross margin increased 28 basis points, driven by greater penetration of proprietary brands, category mix benefits and improved inventory management, the retailer reported.

SG&A expenses declined 4.1 percent compared to last year benefiting from what the company said was tightly managed expenses primarily in stores and marketing.

Kohl’s now expects annual earnings per share of 50 cents to 80 cents for 2025, compared to its previous forecast of 10 cents to 60 cents. Sales are seen declining 5 to 6 percent, while comparable sales are seen dropping 4 to 5 percent.

Wall Street liked Kohl’s second quarter report, pushing the stock price up as high as 22 percent, or $2.88, to $15.92, at around 8 a.m. before the market opened Wednesday.

“Kohl’s second quarter performance is a testament to the progress we are making against our 2025 initiatives,” Michael J. Bender, interim chief executive officer of Kohl’s, said in a statement Wednesday. “This resulted in sales performance that came in ahead of our expectations. While it is clear that these initiatives are beginning to resonate with our customers, our team remains focused on delivering progressive improvement throughout the remainder of the year against a challenging economic backdrop.

“In addition to our top line progress, we managed the business with great discipline in the quarter,” Bender added. “We were able to expand our gross margins, reduce our inventory, and lower our expenses, leading to solid second quarter earnings. I continue to be impressed with our entire team at Kohl’s and I am thankful for all their hard work.”

Kohl’s merchants have been working hard to rearrange assortments and capitalize on best-performing categories. Among the recent accomplishments, last spring Kohl’s completed its rollout of Sephora to all stores in the chain, which the company indicated is on track to represent a $2 billion beauty business.

Growth was seen in jewelry after additional investments in fashion jewelry inventory were made, and there was improved performance in women’s as a result of increased investments in proprietary brands, a streamlining of choices in intimates, and a reintroduction of petites. The company said it built upon “strength of existing proprietary brands while finding opportunities to introduce new brands such as Miryana, Hotelier, and Mingle & Co. in the home space.” Key proprietary brands in fashion include Sonoma and FLX.

Also, impulse queue lines, where customers pick up items as they line up to check out, were expanded to an additional 300 stores in Q2. The impulse category delivered 30 percent sales growth in Q2, Kohl’s indicated.

Kohl’s has also been working to make shopping easier for customers by simplifying its value messaging while expanding its coupon offers.