Updates shares, adds executive and analyst comments throughout

By Sanskriti Shekhar and Danielle Kaye

May 28 (Reuters) - Kohl's KSS.N stuck to its annual targets after posting a smaller-than-expected quarterly loss on Thursday, signaling that the department store chain's turnaround efforts under new CEO Michael Bender have started to pay off.

The company's shares, which declined about 37% this year through Wednesday, jumped 15% in early trading as investors welcomed signs of improving sales trends, including the retailer's best comparable sales in more than four years.

Kohl's named Bender permanent CEO in November to revitalize the business after years of sliding sales and shrinking profit, with the retailer losing ground to Amazon and off-price competitors.

The company has lost about 80% of its value in the past five years amid a series of challenges, including strategic missteps, mounting supply chain issues and uneven demand for discretionary items in a worsening macroeconomic environment.

Bender earlier this year said he planned to cut unproductive styles and focus more on basics. Simultaneously, Kohl's has been reviving categories like jewelry and accessories and expanding its Sephora partnership to win back loyal shoppers and attract younger customers.

On a post-earnings call with analysts on Thursday, Bender said Kohl's is focused on expanding its proprietary brands to appeal to consumers who are increasingly seeking value.

Shoppers "remain under financial pressure," he said, adding that low- and middle-income consumers continue to stretch their dollars as "more of their money is being spent on essentials like food and gas."

U.S. consumer sentiment fell to a record low in May and inflation reached a three-year high. Big-box retailers such as Walmart WMT.O and Target TGT.N have signaled weakening consumer health hit by rising fuel costs.

Still, higher-income households continue to spend, as reflected in recent retail earnings from Abercrombie ANF.N and Ralph Lauren RL.N, with steady sales underscoring resilience.

Kohl's said it continues to expect annual net sales to remain flat or decline up to 2%. It also sees annual earnings per share in the range of $1.00 to $1.60.

The company posted a 1.7% decline of net sales to $3 billion for the quarter ended May 2 — in line with estimates.

Kohl's reported a loss of 13 cents per share, the same as a year ago. Analysts on average had expected a loss of 19 cents per share, according to data compiled by LSEG.

"Against a backdrop of low expectations, this is a modestly better result," analysts at Goldman Sachs wrote in a note.

Kohl's is eligible to receive $190 million in tariff refunds but has not yet received refund payments, CFO Jill Timm told analysts on Thursday.