Will Sephora at Kohl's report negative comparable sales in any quarter of FY2026?

Q4 FY2025 Sephora grew +2% with flat comps -- still positive, confirming the deceleration from +25% but NOT yet negative. The MAC launch in 850+ stores (March 2026) plus Tarte and Charlotte Tilbury pipeline provide genuine new growth vectors that could sustain low-single-digit positive comps through FY2026. The juniors adjacency paying dividends confirms cross-shopping is real. However, the law of large numbers on a $2B+ business makes the deceleration trajectory real. The question asks about ANY quarter being negative across 4 quarters -- even with new brands, one weak quarter is plausible if the deceleration trend continues. The resolved sibling market teaches us to weight management's execution ability higher: they beat comps expectations in Q4. Applying that calibration, Sephora negative in any single quarter is roughly coin-flip, slightly below.

The deceleration trajectory is the dominant signal: +25% to +2%/flat represents a 90%+ growth rate compression in one year. New brand launches (MAC, Tarte, Charlotte Tilbury) are real but represent incremental additions to a mature $2B+ platform, not transformative growth resets. The comparison base for FY2026 is the very period when Sephora had $2B+ in revenue -- these are tough comps. Against a base of flat-to-+2% growth, even modest headwinds (consumer spending pressure, traffic decline) could tip any single quarter negative. Four quarters give four chances. However, the calibration lesson from the sibling market miss argues against over-weighting the bear case: management has shown an ability to beat guidance. I see this as a true coin-flip.

Three counter-signals to the bear case deserve more weight than the prior prediction gave them: (1) MAC launch in 850+ stores is the largest brand addition since the original Sephora launch -- this is a category expansion, not just brand swap. (2) Juniors adjacency paying dividends with +8% comps confirms cross-shopping is working, providing Sephora foot traffic support. (3) Spring seasonal started strong, suggesting FY2026 Q1 may begin positive. The bear case rests entirely on trend extrapolation from +25% to +2% to negative, but new brand launches break that trendline. Against a flat comp base, MAC alone could add 1-2 points of growth. I weight the new brand catalysts as genuinely shifting the probability below 50%.

This is a genuine coin-flip market. The deceleration from +25% to +2%/flat is real and the law of large numbers applies to the $2B+ Sephora business. But new brand launches (MAC in 850+ stores, Tarte, Charlotte Tilbury) provide counter-catalysts that could sustain low-single-digit positive comps. The question requires ANY one of four quarters to go negative. Even with new brands supporting overall trajectory, seasonal variation could produce one negative quarter (e.g., Q2 or Q3 if traffic dips). The Kohl's charge customer improving from down mid-teens to down single digits is modestly positive for Sephora foot traffic. Net assessment: roughly even odds.

The sibling market calibration lesson is important here. Our prior predictions over-anchored on bearish trend extrapolation and under-weighted management execution. Applying that lesson: Sephora is still growing (+2% in Q4), new brands are being added at an accelerating pace, and the ecosystem (juniors adjacency, beauty trends) is intact. The deceleration is real but may have already found a floor around flat-to-low-single-digit positive. MAC in 850+ stores is a genuine growth catalyst that was not in the prior prediction context. FY2026 comps against a flat base are easier than FY2025 comps against +25%. I lean slightly below 50% for negative comps in any quarter.

The market asks about any quarter, giving the bear case four chances. But the updated data tilts modestly against: Sephora has not yet posted a single negative quarter, new brand pipeline is the strongest since the initial partnership launch, and the charge customer is improving. The total company FY2026 guidance of -2% to flat implies management expects continued comp declines, but Sephora has consistently outperformed the total company average. If total company is -2% to flat and core ex-Sephora is -8% to -12%, Sephora needs to be somewhere around +2% to +5% to hit those numbers. This implicit math suggests management expects Sephora to remain positive. Modest downward revision from 53% prior.

Sephora decelerated from +25% to +2%/flat but remains positive. New brand launches (MAC, Tarte, Charlotte Tilbury) provide growth support. However, the law of large numbers on a $2B+ business and 4 quarters of chances mean roughly 50-50 odds of at least one negative quarter.

MAC launch in 850+ stores is a meaningful catalyst. Juniors adjacency +8% confirms cross-shopping. Spring seasonal started strong. These three data points all suggest FY2026 Q1 starts positive for Sephora. The deceleration trend may have bottomed near flat with new brands providing a floor. Slightly below 50%.

Near coin-flip. The deceleration trend is clear and concerning, but Sephora has never posted a negative quarter and new brand additions may sustain low positive comps. The 4-quarter window provides enough chances that even a modest probability per quarter compounds. Calibration lesson from sibling market argues against over-weighting the bear case.