‘Earnings Before Bad Stuff’ Comes Under Renewed SEC Scrutiny

Retailer Kohl’s Corp. picked an unlikely cost to downplay as it reported 2023 annual results to the market: its rent.

Wall Street’s top regulator had some pointed questions. How, as a retailer, could store rent be considered an unusual or one-time expense?

The Securities and Exchange Commission’s query to Kohl’s was one of several the regulator sent to businesses in recent months as part of its perennial campaign to ensure companies don’t hype rosy earnings measures or emphasize results that skeptics call “earnings before bad stuff.”

The SEC permits companies to report supplemental earnings figures that fall outside the bounds ...