Kohl's Corporation Reports Third Quarter Financial Results
MENOMONEE FALLS, Wis.--(BUSINESS WIRE)--November 14, 2013-- Kohl’s Corporation (NYSE:KSS). Kohl’s Corporation today reported results for the quarter and year-to-date period ended November 2, 2013.
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| | Quarter | | Year to Date |
| ($ in millions) | 2013 | | 2012 | | Change | | 2013 | | 2012 | | Change |
| Sales | $ | 4,444 |
| | $ | 4,490 |
| | (1.0)% | | $ | 12,932 |
| | $ | 12,937 |
| | —% |
| Comparable store sales | (1.6 | )% | | 1.1 | % | | - | | (0.9 | )% | | (0.5 | )% | | - |
| Net income | $ | 177 |
| | $ | 215 |
| | (18)% | | $ | 555 |
| | $ | 609 |
| | (9)% |
| Diluted earnings per share | $ | 0.81 |
| | $ | 0.91 |
| | (11)% | | $ | 2.51 |
| | $ | 2.54 |
| | (1)% |
Kevin Mansell, Kohl's chairman, president and chief executive officer, said, “As we enter the Holiday season, we believe we are well-positioned from a merchandise content and inventory perspective to gain market share. We have increased our marketing spending and improved its impact and reach in order to drive higher traffic to our stores and on-line. Our customer will find the perfect gift for everyone on her shopping list at Kohl's and will be excited by the value she receives in both our only-at-Kohl's and national brands."
Dividend
On November 13, 2013, Kohl's Board of Directors declared a quarterly cash dividend on the Company's common stock of $0.35 per share. The dividend is payable December 24, 2013 to shareholders of record at the close of business on December 11, 2013.
Store Update
Kohl’s ended the quarter with 1,158 stores in 49 states, compared with 1,146 stores at the same time last year. The Company opened three new stores during the third quarter and nine new stores during the first quarter of 2013. Additionally, the Company remodeled 30 stores in 2013.
Earnings Guidance
The Company provided initial guidance for the fiscal quarter ending February 1, 2014 of $1.59 to $1.74 per diluted share. The guidance is based on total sales declines of 2 to 4 percent and comparable store sales declines of 0 to 2 percent. The Company also updated its annual earnings per share guidance from $4.15 - $4.35 to $4.08 to $4.23. The Company also announced that it will provide only annual guidance beginning in Fiscal 2014.
Third Quarter 2013 Earnings Conference Call
Kohl's will host its quarterly earnings conference call at 8:30 am ET on November 14, 2013. The phone number for the conference call is (706) 902-0486. Replays of the call will be available for 30 days by dialing (855) 859-2056 or (404) 537-3406. The conference ID for both the live call and the replay is 24984194. The conference call and replays are also accessible via the Company's web site at http://www.kohlscorporation.com/InvestorRelations/event-calendar.htm.
Cautionary Statement Regarding Forward-Looking Information
This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including guidance on the Company's targeted sales and earnings. Kohl's intends forward-looking terminology such as “believes,” “expects,” “may,” “will,” “should,” “anticipates,” “plans,” or similar expressions to identify forward-looking statements. Such statements are
subject to certain risks and uncertainties, which could cause Kohl's actual results to differ materially from those anticipated by the forward-looking statements. These risks and uncertainties include, but are not limited to, those described in Item 1A in Kohl's Annual Report on Form 10-K, which is expressly incorporated herein by reference, and other factors as may periodically be described in Kohl's filings with the SEC.
About Kohl's
Based in Menomonee Falls, Wis., Kohl’s (NYSE: KSS) is a family-focused, value-oriented specialty department store offering moderately priced, exclusive and national brand apparel, shoes, accessories, beauty and home products in an exciting shopping environment. With a commitment to environmental leadership, Kohl’s operates 1,158 stores in 49 states. In support of the communities it serves, Kohl’s has raised more than $231 million for children’s initiatives nationwide through its Kohl’s Cares® cause merchandise program, which operates under Kohl's Cares, LLC, a wholly-owned subsidiary of Kohl's Department Stores, Inc. For a list of store locations and information, or for the added convenience of shopping online, visit www.Kohls.com, join the discussion on Facebook (http://www.facebook.com/kohls) or Twitter (http://twitter.com/Kohls) or get inspired on Pinterest (http://pinterest.com/kohls/) and Instagram (http://instagram.com/kohls).
Contacts
Investor Relations:
Wes McDonald, Senior Executive Vice President and Chief Financial Officer, (262) 703-1893
Joanne Crevoiserat, Executive Vice President - Finance, (262) 703-2945
Media:
Kristen Cunningham, Manager - Public Relations, (262) 703-7863
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| KOHL'S CORPORATION |
| CONSOLIDATED STATEMENTS OF INCOME |
| (In Millions, except per share data) |
| (Unaudited) |
| | | | | | | | |
| | Three Months Ended | | Nine Months Ended |
| | November 2,
2013 | | October 27,
2012 | | November 2,
2013 | | October 27, 2012 |
| Net sales | $ | 4,444 |
| | $ | 4,490 |
| | $ | 12,932 |
| | $ | 12,937 |
|
| Cost of merchandise sold | 2,778 |
| | 2,778 |
| | 8,063 |
| | 8,059 |
|
| | | | | | | | |
| Gross margin | 1,666 |
| | 1,712 |
| | 4,869 |
| | 4,878 |
|
| | | | | | | | |
| Operating expenses: | | | | | | | |
| Selling, general, and administrative | 1,073 |
| | 1,077 |
| | 3,071 |
| | 3,055 |
|
| Depreciation and amortization | 228 |
| | 210 |
| | 665 |
| | 620 |
|
| | | | | | | | |
| Operating income | 365 |
| | 425 |
| | 1,133 |
| | 1,203 |
|
| | | | | | | | |
| Interest expense, net | 84 |
| | 80 |
| | 251 |
| | 243 |
|
| | | | | | | | |
| Income before income taxes | 281 |
| | 345 |
| | 882 |
| | 960 |
|
| Provision for income taxes | 104 |
| | 130 |
| | 327 |
| | 351 |
|
| | | | | | | | |
| Net income | $ | 177 |
| | $ | 215 |
| | $ | 555 |
| | $ | 609 |
|
| | | | | | | | |
| Basic net income per share | $ | 0.82 |
| | $ | 0.92 |
| | $ | 2.53 |
| | $ | 2.56 |
|
| Average number of shares | 216 |
| | 233 |
| | 219 |
| | 238 |
|
| | | | | | | | |
| Diluted net income per share | $ | 0.81 |
| | $ | 0.91 |
| | $ | 2.51 |
| | $ | 2.54 |
|
| Average number of shares | 218 |
| | 235 |
| | 221 |
| | 240 |
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| | | | | | | | |
| As a percent of net sales: | | | | | | | |
| Gross margin | 37.5 | % | | 38.1 | % | | 37.7 | % | | 37.7 | % |
| Selling, general and | | | | | | | |
| administrative expenses | 24.1 | % | | 24.0 | % | | 23.7 | % | | 23.6 | % |
| Operating income | 8.2 | % | | 9.5 | % | | 8.8 | % | | 9.3 | % |
| Net income | 4.0 | % | | 4.8 | % | | 4.3 | % | | 4.7 | % |
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| KOHL'S CORPORATION |
| CONSOLIDATED BALANCE SHEETS |
| (In Millions) |
| (Unaudited) |
| | | | | |
| | | November 2,
2013 | | October 27,
2012 |
| Assets | | | | |
| Current assets: | | | | |
| Cash and cash equivalents | | $ | 598 |
| | $ | 550 |
|
| Merchandise inventories | | 4,959 |
| | 4,851 |
|
| Deferred income taxes | | 147 |
| | 124 |
|
| Other | | 283 |
| | 281 |
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| | | | | |
| Total current assets | | 5,987 |
| | 5,806 |
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| | | | | |
| Property and equipment, net | | 8,925 |
| | 9,009 |
|
| Long-term investments | | 57 |
| | 90 |
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| Other assets | | 276 |
| | 256 |
|
| | | | | |
| Total assets | | $ | 15,245 |
| | $ | 15,161 |
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| | | | | |
| Liabilities and Shareholders' Equity | | | | |
| Current liabilities: | | | | |
| Accounts payable | | $ | 2,261 |
| | $ | 2,429 |
|
| Accrued liabilities | | 1,198 |
| | 1,127 |
|
| Income taxes payable | | 41 |
| | 48 |
|
| Current portion of capital lease | | | | |
| and financing obligations | | 141 |
| | 100 |
|
| | | | | |
| Total current liabilities | | 3,641 |
| | 3,704 |
|
| | | | | |
| Long-term debt | | 2,792 |
| | 2,492 |
|
| Capital lease and financing obligations | | 1,950 |
| | 1,986 |
|
| Deferred income taxes | | 390 |
| | 395 |
|
| Other long-term liabilities | | 548 |
| | 478 |
|
| Shareholders' equity | | 5,924 |
| | 6,106 |
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| | | | | |
| Total liabilities and shareholders' equity | | $ | 15,245 |
| | $ | 15,161 |
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| KOHL'S CORPORATION |
| CONSOLIDATED STATEMENTS OF CASH FLOWS |
| (In Millions) |
| (Unaudited) |
| |
| | Nine Months Ended |
| | November 2,
2013 | | October 27,
2012 |
| Operating activities | | | |
| Net income | $ | 555 |
| | $ | 609 |
|
| Adjustments to reconcile net income to net cash | | | |
| provided by operating activities: | | | |
| Depreciation and amortization | 665 |
| | 620 |
|
| Share-based compensation | 41 |
| | 37 |
|
| Excess tax benefits from share-based compensation | (3 | ) | | (3 | ) |
| Deferred income taxes | (1 | ) | | (46 | ) |
| Other non-cash revenues and expenses | 30 |
| | 26 |
|
| Changes in operating assets and liabilities: | | | |
| Merchandise inventories | (1,204 | ) | | (1,628 | ) |
| Other current and long-term assets | 11 |
| | 30 |
|
| Accounts payable | 954 |
| | 1,196 |
|
| Accrued and other long-term liabilities | 79 |
| | (47 | ) |
| Income taxes | (113 | ) | | (91 | ) |
| | | | |
| Net cash provided by operating activities | 1,014 |
| | 703 |
|
| | | | |
| Investing activities | | | |
| Acquisition of property and equipment | (465 | ) | | (641 | ) |
| Sales of investments in auction rate securities | 1 |
| | 68 |
|
| Other | 13 |
| | 5 |
|
| | | | |
| Net cash used in investing activities | (451 | ) | | (568 | ) |
| | | | |
| Financing activities | | | |
| Treasury stock purchases | (562 | ) | | (883 | ) |
| Dividends paid | (229 | ) | | (227 | ) |
| Proceeds from issuance of debt | 300 |
| | 350 |
|
| Proceeds from financing obligations | — |
| | 7 |
|
| Capital lease and financing obligation payments | (87 | ) | | (87 | ) |
| Proceeds from stock option exercises | 77 |
| | 50 |
|
| Excess tax benefits from share-based compensation | 3 |
| | 3 |
|
| Deferred financing costs | (4 | ) | | (3 | ) |
| | | | |
| Net cash used in financing activities | (502 | ) | | (790 | ) |
| | | | |
| Net increase (decrease) in cash and cash equivalents | 61 |
| | (655 | ) |
| Cash and cash equivalents at beginning of period | 537 |
| | 1,205 |
|
| | | | |
| Cash and cash equivalents at end of period | $ | 598 |
| | $ | 550 |
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