The company also said it planned to reinstate a dividend during the first half of 2021. A company statement didn't specify an amount or other details.
For the quarter ended Oct. 31 the Menomonee Falls, Wis., department-store chain swung to a loss of 8 cents a share from profit of 78 cents in the year-earlier quarter. Adjusted earnings in the latest period were a penny a share.
Revenue of $3.98 billion fell 14% from $4.63 billion.
Analysts surveyed by FactSet were calling for a GAAP loss of 41 cents a share, or an adjusted loss of 43 cents, on revenue of $3.88 billion.
Comparable-store sales declined 13.3%, steeper than the 11.7% Wall Street was expecting for the period.
"Our third-quarter results exceeded our expectations, with significant sequential sales and profitability improvement," Chief Executive Michelle Gass said in a statement.
"Digital sales growth remained strong and our actions to improve our gross margin showed great progress."
Gross margin in the quarter narrowed to 35.8% from 36.3% in the year-earlier quarter.
Kohl's shares at last check were off 1.3% at $25.80. They closed the regular session on Monday up 7.8% at $26.15.
"We also further strengthened our financial position and fully repaid our [revolving credit] during the period, which underscores the solid cash flow generation of our business," Gass said.
And she said Kohl's "entered the holiday season well-positioned and prepared to serve our customers with more omnichannel conveniences in place."
Kohl's ended the quarter with $1.9 billion of cash.