Retail, National Trades & First Call - Release: March 04, 2003 at 4:00 p.m.(EST)
Kohl's Corporation Reports Fiscal 2002 Earnings Up 29.8%;
4th Quarter Earnings up 19.3%
MENOMONEE FALLS, WI., Mar. 04/Business Wire/--Kohl's Corporation (NYSE:KSS) reported record sales and earnings for the fourth quarter and year ended February 1, 2003.
Fiscal Year 2002 Results
Net income for the fiscal year ended Feb. 1, 2003, increased 29.8% to $643.4 million, or $1.87 per diluted share, compared to $495.7 million, or $1.45 per diluted share for the fiscal year ended February 2, 2002. Net sales increased 21.8% to $9,120.3 million from $7,488.7 million a year ago. Comparable store sales increased 5.3%.
Fourth Quarter Results
Net income for the fourth quarter ended Feb. 1, 2003, increased 19.3% to $279.0 million, or $0.81 per diluted share, compared to $233.8 million or $0.68 per diluted share for the quarter ended February 2, 2002. For the quarter, net sales increased 16.9% to $3,184.5 million from $2,724.2 million a year ago. Comparable store sales increased 1.2%.
Performance
Chairman & Chief Executive Officer Larry Montgomery said: "In a challenging retail environment, we demonstrated our ability to deliver both top and bottom line results. Total sales increased 21.8% over last year while comparable store sales increased 5.3%. We increased market share in every region where we operate. At the same time, we increased net income 29.8% over last year. This follows six consecutive years of earnings growth in excess of 30%. The credit for our success goes to over 70,000 hard working and dedicated Associates.”
Expansion Update
During the year, the company opened 75 new stores including entries into the Boston, Houston, Nashville and Providence markets.
The Company plans to open approximately 80 new stores in 2003. Thirty-five stores will be opened in the first quarter, including the company’s entry into the Southern California market. Kohl’s will grand open 28 stores in the greater Los Angeles area on March 7th. In April, the Company will enter the San Antonio, TX market with three stores and open stores in Kalamazoo, MI; Springfield, MA; Hookset, NH and Doylestown, PA. At February 1, 2003, the Company operated 457 stores in 33 states compared with 382 stores in 29 states at the same time last year.
In the fall season, Kohl’s plans to open approximately 45 new stores, including entering the Phoenix, AZ market with 10 stores, Tucson, AZ with two stores, Flagstaff, AZ with one store and Las Vegas, NV with three stores.
In 2004, the Company plans to open approximately 95-100 new stores. The stores will open in a combination of new and existing markets. The Company will continue to expand its presence in the Southwest region, with additional stores in the greater Los Angeles area and new market entries into Sacramento, San Diego and Fresno. In addition, the company plans to continue to add fill-in locations in selected existing markets across the country.
Investor Conference Call
Investors will have the opportunity to listen to the 4th quarter earnings conference call today at 5:00 p.m. (EST) by dialing 847-619-6368 ten minutes prior to the start of the call, or over the Internet through the Company's web site located athttp://www.kohls.com (see "Home Page"), or through Broadcast Networks' Vcall web site located athttp://www.vcall.com. To listen to the call, please go to either web site at least fifteen minutes early to register, download and install any necessary audio software. For those who cannot listen to the live broadcast, a replay will be available shortly after the call. To access a 24-hour telephone replay of the call, simply dial 630-652-3018. Pass Code: 6734790.
Merrill Lynch Conference
Kohl’s President, Kevin Mansell, will be speaking at the Merrill Lynch Global Retail Leaders Conference in New York City on March 19, 2003, at 11:20 a.m. (EST). The presentation will be web cast live (audio-only) over the Internet via ON24, Inc. athttp://webcast.on24.com/clients/merrill/conference_030319/index.html?sessionid=11&presenter=kohls or through the Company’s web site located atwww.kohls.com (see “Company News”). For those who cannot listen to the live broadcast, a seven day replay will be available shortly after the call. To access the replay, simply visit the link above.
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. Kohl's intends forward-looking statements such as "believes", "expects", "may", "will", "should" or "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 on Exhibit 99.1 to 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.
Investor Relations Contact: Patti Johnson, Chief Financial Officer – Finance - (262) 703-1893
Media Contact: Susan Henderson, Vice President – Public Relations - (262) 703-1302
###
KOHL'S CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
13 weeks ended
13 weeks ended
February 1,
% to
February 2,
% to
2003
Net sales
2002
Net sales
(In thousands, except per share data)
Net sales
$ 3,184,479
2,724,225
Cost of merchandise sold
2,133,528
67.0%
1,825,039
67.0%
Gross margin
1,050,951
33.0%
899,186
33.0%
Operating expenses:
Selling, general, and administrative
527,226
16.6%
464,334
17.0%
Depreciation and amortization
50,979 1.6%
40,414
1.5%
Goodwill amortization
-- 0.0%
1,300
0.0%
Preopening expenses
7,663
0.2%
3,857
0.2%
Operating income
465,083 14.6%
389,281
14.3%
Interest expense, net
16,612 0.5%
13,128 0.5%
Income before income taxes
448,471 14.1%
376,153
13.8%
Provision for income taxes
169,520 5.3%
142,331 5.2%
Net income
278,951 8.8%
$233,822 8.6%
Earnings per share:
Basic
Net income per share
$ 0.83
$ 0.70
Average number of shares
337,175
334,999
Diluted
Net income per share
$ 0.81 (a)
$ 0.68 (a)
Average number of shares
346,657 (b)
346,121 (b)
LIFO credit
9,249
3,458
(a)
For both periods presented, the earnings per share is calculated using the “if converted” method. The net income in the calculation is $280,402 and $235,233, which includes interest on convertible debt securities, net of tax, of $1,451 and $1,411 in 2002 and 2001, respectively.
(b)
For both periods presented, the average number of shares includes 3,946 shares related to the assumed conversion of the convertible debt securities.
KOHL'S CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
52 weeks ended
52 weeks ended
February 1,
% to
February 2,
% to
2003
Net sales
2002
Net sales
(In thousands, except per share data)
Net sales
$ 9,120,287
$ 7,488,654
Cost of merchandise sold
5,981,219
65.6%
4,923,527 65.7%
Gross margin
3,139,068
34.4%
2,565,127
34.3%
Operating expenses:
Selling, general, and administrative
1,817,968
19.9%
1,527,478
20.4%
Depreciation and amortization
191,439 2.1%
151,965
2.0%
Goodwill amortization
--
0.0%
5,200
0.1%
Preopening expenses
39,278
0.4%
30,509
0.4%
Operating income
1,090,383
12.0%
849,975
11.4%
Interest expense, net
56,009
0.6%
50,111 0.7%
Income before income taxes
1,034,374
11.4%
799,864 10.7%
Provision for income taxes
390,993
4.3 %
304,188 4.1%
Net income
$ 643,381 7.1%
$ 495,676
6.6%
Earnings per share:
Basic
Net income per share
$ 1.91
$ 1.48
Average number of shares
336,676
334,141
Diluted
Net income per share
$ 1.87
(c)
$ 1.45
(c)
Average number of shares
346,694
(d)
344,944
(d)
LIFO
credit / (charge)
2,130
(2,259)
(c)
For both periods presented, the earnings per share is calculated using the “if converted” method. The net income in the calculation is $649,120 and $501,238, which includes interest on convertible debt securities, net of tax, of $5,739 and $5,562 in 2002 and 2001, respectively.
(d)
For both periods presented, the average number of shares includes 3,946 shares related to the assumed conversion of the convertible debt securities.
Kohl’s Corporation |
Condensed Consolidated Balance Sheet |
Subject to Reclassification |
| |
| | February 1, 2003 | February 2, 2002 |
| | (In thousands) |
| | | |
Assets | | |
Current assets: | | |
Cash and cash equivalents | $90,085 | $106,722 |
Short-term investments | 475,991 | 229,377 |
Accounts receivable trade, net | 990,810 | 835,946 |
Merchandise inventories | 1,626,996 | 1,198,307 |
Deferred income taxes | 56,693 | 52,292 |
Other current assets | 43,519 | 41,400 |
Total current assets | 3,284,094 | 2,464,044 |
| | | |
Property and equipment, net | 2,739,290 | 2,199,494 |
Other assets | 102,361 | 81,850 |
Favorable lease rights, net | 180,420 | 174,860 |
Goodwill, net | 9,338 | 9,338 |
Total assets | $6,315,503 | $4,929,586 |
| | | |
Liabilities and Shareholders’ Equity | | |
| | | |
Current liabilities: | | |
Accounts payable | $694,748 | $478,870 |
Accrued liabilities | 315,630 | 259,598 |
Income taxes payable | 142,150 | 125,085 |
Current portion of long-term debt | 355,464 | 16,418 |
Total current liabilities | 1,507,992 | 879,971 |
| | | |
Long-term debt | 1,058,784 | 1,095,420 |
Deferred income taxes | 171,951 | 114,228 |
Other long-term liabilities | 64,859 | 48,561 |
Shareholders’ equity | 3,511,917 | 2,791,406 |
Total liabilities and | | |
shareholders’ equity | $6,315,503 | $4,929,586 |
Kohl’s Corporation
Condensed Consolidated Statements of Cash Flows
Subject to Reclassification
February 1, 2003 February 2, 2002
(In thousands)
Operating Activities
Net income
$643,381
$495,676
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization
192,410
157,939
Amortization of debt discount
9,381
9,110
Deferred income taxes
53,322
17,211
Changes in operating assets and liabilities:
Accounts receivable
(154,864)
(154,690)
Merchandise inventories
(428,689)
(195,017)
Other current assets
(2,119)
(15,801)
Accounts payable
215,878
78,931
Accrued and other long-term liabilities
77,988
79,337
Income taxes payable
62,896
69,121
Net cash provided by operating activities
669,584
541,817
Investing activities
Acquisition of property and equipment and favorable
lease rights, net
(715,968)
(662,011)
Net purchase of short-term investments
(246,614)
(180,777)
Other
(32,473)
(28,520)
Net cash used in investing activities
(995,055)
(871,308)
Financing Activities
Net repayments of short-term debt
-
(5,000)
Proceeds from public debt offering, net
297,759
299,503
Repayments of other long-term debt, net
(16,772)
(16,424)
Payment of financing fees on debt
(3,452)
(1,615)
Proceeds from stock option exercises
31,299
36,128
Net cash provided by financing activities
308,834
312,592
Net decrease cash and cash equivalents
(16,637)
(16,899)
Cash and cash equivalents at beginning of period
106,722
123,621
Cash and cash equivalents at end of period
$ 90,085
$106,722
