Kohl's Corporation Reports Fourth Quarter Financial Results
MENOMONEE FALLS, Wis.--(BUSINESS WIRE)--February 27, 2014-- Kohl’s Corporation (NYSE:KSS). Kohl’s Corporation today reported results for the quarter and fiscal year ended February 1, 2014.
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| | | | | | | | | | | | | | | | | | | | | |
| | Quarter | | Year |
| ($ in millions, except per share amounts) | 2013 | | 2012 | | Change | | 2013 | | 2012 | | Change |
| Increase (decrease) in | | | | | | | | | | | |
comparable sales (1) | (2.0 | )% | | 1.9 | % | | - |
| | (1.2 | )% | | 0.3 | % | | - |
| | | | | | | | | | | | |
Total sales(2) | $ | 6,099 |
| | $ | 6,342 |
| | (3.8 | )% | | $ | 19,031 |
| | $ | 19,279 |
| | (1.3 | )% |
| Net income | $ | 334 |
| | $ | 378 |
| | (12)% | | $ | 889 |
| | $ | 986 |
| | (10)% |
| Diluted earnings per share | $ | 1.56 |
| | $ | 1.66 |
| | (6)% | | $ | 4.05 |
| | $ | 4.17 |
| | (3)% |
| | | | | | | | | | | | |
(1) Compares the periods ended February 1, 2014 to the periods ended January 26, 2013
(2) Compares the periods ended February 1, 2014 to the periods ended February 2, 2013
Kevin Mansell, Kohl’s chairman, president and chief executive officer, said, "We were pleased with our sales during the November and December holiday season as the customer responded favorably to our merchandise and values. Despite increased shipping costs related to our E-Commerce business, we were able to achieve our gross margin guidance for the quarter. We believe our inventory levels and assortment are well-positioned as we transition into the spring season."
Impact of 53rd Week in Fiscal 2012
The retail calendar for fiscal January 2013 included a fifth week, resulting in a 14-week fiscal fourth quarter and a 53-week year. During this 53rd week, total sales were $169 million; selling, general and administrative expenses were $30 million; interest was $2 million; net income was $15 million and diluted earnings per share was $0.06.
Dividend
On February 26, 2014 Kohl's Board of Directors declared a quarterly cash dividend on the Company's common stock of $0.39 per share, an increase of 11 percent over its previous dividend. The dividend is payable March 26, 2014 to shareholders of record at the close of business on March 12, 2014.
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. During 2013, the Company opened 12 new stores and completed 30 remodels.
Earnings Guidance
The Company issued its initial guidance for fiscal 2014. Based on assumptions of total sales increases of 0.5 percent to 2.5 percent and comparable sales increases of 0 to 2 percent, the Company expects earnings per diluted share of $4.05 to $4.45 for the year.
Fourth Quarter 2013 Earnings Conference Call
Kohl’s will host its quarterly earnings conference call at 8:30 am ET on February 27, 2014. The phone number for the conference call is (706) 902-0486 and the conference ID is 24984977. Replays of the call will be available for 30 days by dialing (855) 859-2056 or (404) 537-3406. 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 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).
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:
Jen Johnson, Director - Public Relations, (262) 703-5241
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| KOHL'S CORPORATION |
| CONSOLIDATED STATEMENTS OF INCOME |
| (In Millions, except per share data) |
| (Unaudited) |
| | | | | | | | |
| | Three Months | | Twelve Months |
| | Feb 1,
2014 | | Feb 2,
2013 | | Feb 1,
2014 | | Feb 2,
2013 |
| | (13 Weeks) | | (14 Weeks) | | (52 Weeks) | | (53 Weeks) |
| | | | | | | | |
| Net sales | $ | 6,099 |
| | $ | 6,342 |
| | $ | 19,031 |
| | $ | 19,279 |
|
| Cost of merchandise sold | 4,024 |
| | 4,230 |
| | 12,087 |
| | 12,289 |
|
| | | | | | | | |
| Gross margin | 2,075 |
| | 2,112 |
| | 6,944 |
| | 6,990 |
|
| | | | | | | | |
| Operating expenses: | | | | | | | |
| Selling, general, and administrative | 1,242 |
| | 1,212 |
| | 4,313 |
| | 4,267 |
|
| Depreciation and amortization | 224 |
| | 214 |
| | 889 |
| | 833 |
|
| | | | | | | | |
| Operating income | 609 |
| | 686 |
| | 1,742 |
| | 1,890 |
|
| | | | | | | | |
| Interest expense, net | 87 |
| | 85 |
| | 338 |
| | 329 |
|
| | | | | | | | |
| Income before income taxes | 522 |
| | 601 |
| | 1,404 |
| | 1,561 |
|
| Provision for income taxes | 188 |
| | 223 |
| | 515 |
| | 575 |
|
| | | | | | | | |
| Net income | $ | 334 |
| | $ | 378 |
| | $ | 889 |
| | $ | 986 |
|
| | | | | | | | |
| Basic net income per share | $ | 1.57 |
| | $ | 1.66 |
| | $ | 4.08 |
| | $ | 4.19 |
|
| Average number of shares | 213 |
| | 227 |
| | 218 |
| | 235 |
|
| | | | | | | | |
| Diluted net income per share | $ | 1.56 |
| | $ | 1.66 |
| | $ | 4.05 |
| | $ | 4.17 |
|
| Average number of shares | 215 |
| | 228 |
| | 220 |
| | 237 |
|
| | | | | | | | |
| As a percent of net sales: | | | | | | | |
| Gross margin | 34.0 | % | | 33.3 | % | | 36.5 | % | | 36.3 | % |
| Selling, general and | | | | | | | |
| administrative expenses | 20.4 | % | | 19.1 | % | | 22.7 | % | | 22.1 | % |
| Operating income | 10.0 | % | | 10.8 | % | | 9.2 | % | | 9.8 | % |
| Net income | 5.5 | % | | 6.0 | % | | 4.7 | % | | 5.1 | % |
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| KOHL'S CORPORATION |
| CONSOLIDATED BALANCE SHEETS |
| (In Millions) |
| (Unaudited) |
| | | | | |
| | | Feb 1,
2014 | | Feb 2,
2013 |
| Assets | | | | |
| Current assets: | | | | |
| Cash and cash equivalents | | $ | 971 |
| | $ | 537 |
|
| Merchandise inventories | | 3,874 |
| | 3,748 |
|
| Deferred income taxes | | 142 |
| | 122 |
|
| Other | | 305 |
| | 312 |
|
| | | | | |
| Total current assets | | 5,292 |
| | 4,719 |
|
| | | | | |
| Property and equipment, net | | 8,745 |
| | 8,872 |
|
| Long-term investments | | 64 |
| | 53 |
|
| Other assets | | 277 |
| | 261 |
|
| | | | | |
| Total assets | | $ | 14,378 |
| | $ | 13,905 |
|
| | | | | |
| Liabilities and Shareholders' Equity | | | | |
| Current liabilities: | | | | |
| Accounts payable | | $ | 1,365 |
| | $ | 1,307 |
|
| Accrued liabilities | | 1,138 |
| | 986 |
|
| Income taxes payable | | 94 |
| | 137 |
|
| Current portion of capital lease | | | | |
| and financing obligations | | 139 |
| | 105 |
|
| | | | | |
| Total current liabilities | | 2,736 |
| | 2,535 |
|
| | | | | |
| Long-term debt | | 2,792 |
| | 2,492 |
|
| Capital lease and financing obligations | | 1,930 |
| | 1,956 |
|
| Deferred income taxes | | 382 |
| | 362 |
|
| Other long-term liabilities | | 560 |
| | 512 |
|
| Shareholders' equity | | 5,978 |
| | 6,048 |
|
| | | | | |
| Total liabilities and shareholders' equity | | $ | 14,378 |
| | $ | 13,905 |
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| KOHL'S CORPORATION |
| CONSOLIDATED STATEMENTS OF CASH FLOWS |
| (In Millions) |
| (Unaudited) |
| |
| | Feb 1,
2014 | | Feb 2,
2013 |
| | (52 Weeks) | | (53 Weeks) |
| Operating activities | | | |
| Net income | $ | 889 |
| | $ | 986 |
|
| Adjustments to reconcile net income to net cash | | | |
| provided by operating activities: | | | |
| Depreciation and amortization | 889 |
| | 833 |
|
| Share-based compensation | 55 |
| | 50 |
|
| Excess tax benefits from share-based compensation | (3 | ) | | (4 | ) |
| Deferred income taxes | (7 | ) | | (79 | ) |
| Other non-cash revenues and expenses | 43 |
| | 29 |
|
| Changes in operating assets and liabilities: | | | |
| Merchandise inventories | (116 | ) | | (523 | ) |
| Other current and long-term assets | (11 | ) | | (37 | ) |
| Accounts payable | 58 |
| | 74 |
|
| Accrued and other long-term liabilities | 149 |
| | (60 | ) |
| Income taxes | (62 | ) | | (4 | ) |
| | | | |
| Net cash provided by operating activities | 1,884 |
| | 1,265 |
|
| | | | |
| Investing activities | | | |
| Acquisition of property and equipment | (643 | ) | | (785 | ) |
| Sales of investments in auction rate securities | 1 |
| | 109 |
|
| Other | 19 |
| | 16 |
|
| | | | |
| Net cash used in investing activities | (623 | ) | | (660 | ) |
| | | | |
| Financing activities | | | |
| Treasury stock purchases | (799 | ) | | (1,284 | ) |
| Shares withheld for restricted shares | (13 | ) | | (9 | ) |
| Dividends paid | (302 | ) | | (300 | ) |
| Proceeds from issuance of debt | 300 |
| | 350 |
|
| Deferred financing costs | (4 | ) | | (3 | ) |
| Proceeds from financing obligations | 1 |
| | 12 |
|
| Capital lease and financing obligation payments | (115 | ) | | (111 | ) |
| Proceeds from stock option exercises | 102 |
| | 68 |
|
| Excess tax benefits from share-based compensation | 3 |
| | 4 |
|
| | | | |
| Net cash used in financing activities | (827 | ) | | (1,273 | ) |
| | | | |
| Net increase (decrease) in cash and cash equivalents | 434 |
| | (668 | ) |
| Cash and cash equivalents at beginning of period | 537 |
| | 1,205 |
|
| | | | |
| Cash and cash equivalents at end of period | $ | 971 |
| | $ | 537 |
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