Investors were practically giddy yesterday when Kohl’s surfaced some glimmers of good news in its second-quarter earnings call. The stock is up 21% over the last few days. Interim CEO Michael Bender, a Kohl’s director who took the reins in May after the previous CEO’s surprise ouster, laid out his plans to get “back to growth.” But there are still many reasons to be cautious—and three big reasons these types of turnarounds are so challenging. 

Cost-cutting takes a toll: The cost cuts and tight inventory, which protect margins, is giving Kohl’s financial breathing room to take another stab at turning itself around. But some of the moves Kohl’s has made to protect profits can in fact hurt sales. Lower inventory helps margins by reducing how much merchandise gets discounted if it’s not catching on with shoppers but it can also mean lost sales and visually unappealing empty shelves. Leaner staffing means lower costs but can also mean messier stores, and long waits to check out that can frustrate a shopper and foment low morale among employees.

The competition is fierce: Turnarounds don’t happen in a vacuum. When one player is struggling, rivals capitalize on that weakness to grab market share. Last year, Kohl’s saw sales in every category it sells, except for the Sephora shops, fall by a double-digit percentage. Kohl’s has lost millions of customers and its business is 20% smaller than it was in 2019, while T.J. Maxx, Walmart and Target are much larger now. 

Management is walking on a financial tightrope: Earlier this year, Kohl’s cut its dividend 75% to conserve money and this week, Bloomberg reported Kohl’s was asking for more time to pay some vendors—so it’s an open question on how much Kohl’s can spend on its turnaround. “It’s not that management lacks the will to improve or the desire for change. The challenge lies in an inability to execute at an operational level,” says GlobalData managing director Neil Saunders.

There were some reasons for optimism in Kohl’s report on Wednesday. Comparable sales were unchanged in July, and as CEO Bender struck many of the right notes that investors and employees alike want to hear. And while investors were no doubt relieved to see any good news at all, they must keep in mind that like all turnarounds, the saga at Kohl’s remains a show-me story.—Phil Wahba

Contact CEO Daily via Diane Brady at diane.brady@fortune.com

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CEO Daily is compiled and edited by Joey Abrams and Jim Edwards.