Exhibit 99.1
National & Retail Trades and First Call, Release: November 13, 2003 at 4:00 PM (EST)
KOHL'S CORPORATION REPORTS THIRD QUARTER EARNINGS
MENOMONEE FALLS, WI Nov. 13/BUSINESS WIRE/Kohl's Corporation (NYSE:KSS). Kohl's Corporation today reported results for the three months and nine months ended November 1, 2003.
For the third quarter, net sales increased to $2.4 billion from $2.1 billion a year ago, an increase of 11.7%. Comparable store sales declined 1.3%. Net income was $121.2 million or $0.35 per diluted share, compared with $133.4 million or $0.39 per diluted share a year ago.
For the nine months ended November 1, 2003, net sales increased to $6.7 billion from $5.9 billion for the nine months ended November 2, 2002. This reflects a 13.2% total increase while comparable store sales declined 1.0%. Net income was $344.3 million or $1.00 per diluted share, compared with $364.4 million or $1.06 per diluted share a year ago.
Expansion Update
The Company successfully opened 50 new stores during the quarter. The Company entered the Phoenix, AZ market with ten stores; the Little Rock, AR market with three stores; the Las Vegas, NV market with three stores; the Birmingham, AL market with two stores; the Tucson, AZ market with two stores; and the Flagstaff, AZ market with one store. In addition, the Company added eleven stores in the Midwest region, five stores in the Mid-Atlantic region, five stores in the Northeast region, four stores in the Southeast region, two stores in the South Central region, and two stores in the Southwest region.
The Company plans to open approximately 95 new stores in fiscal 2004. In the first quarter, the Company will open approximately 48 stores, split evenly between new market entries and fill-ins in existing markets. New markets include Sacramento, San Diego and Fresno, California and Memphis, Tennessee. The remaining new stores to be opened in existing markets will be spread across all regions of the country.
The Company now operates 542 stores compared with 457 stores at the same time last year.
Third Quarter Earnings Conference Call
Investors will have the opportunity to listen to the third quarter earnings conference call today at 5:00 PM (EDT) by dialing 847-619-6398 ten minutes prior to the start of the call. A replay of the call will be available for approximately 24 hours after the conclusion of the call at 630-652-3000, pass code: 7815641. In addition, the call will be web cast live over the Internet through the Company's web site located at "http://www.kohls.com (see "Home Page") or through Broadcast Network's Vcall web site located at "http://www.vcall.com. To listen to the live 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 via the Internet, a replay will be available for approximately 30 days after the conclusion of the web cast.
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 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 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: Wes McDonald, Chief Financial Officer, (262) 703-1893
Media Contact: Tawn Earnest, Manager - Public Relations, (262) 703-6609
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KOHL'S CORPORATION |
CONDENSED CONSOLIDATED STATEMENTS OF INCOME |
(In Millions, except per share data) |
(Unaudited) |
| | | | | | | | | | | | | | | | |
| | 3 Months Ended | 9 Months Ended |
| | Nov. 1, 2003 | % to Net Sales | Nov. 2, 2002 | % to Net Sales | Nov. 1, 2003 | % to Net Sales | Nov. 2, 2002 | % to Net Sales |
| | | | | | | | | | | | | | | | |
Net sales | | $ 2,394.0 | | | | $ 2,143.4 | | | | $ 6,720.2 | | | | $ 5,935.8 | | |
Cost of merchandise sold | 1,578.7 | | 65.9% | | 1,399.1 | | 65.3% | | 4,426.8 | | 65.9% | | 3,847.7 | | 64.8% |
| | | | | | | | | | | | | | | | |
Gross margin | 815.3 | | 34.1% | | 744.3 | | 34.7% | | 2,293.4 | | 34.1% | | 2,088.1 | | 35.2% |
| | | | | | | | | | | | | | | |
Operating expenses | | | | | | | | | | | | | | | |
Selling, general and administrative | 524.0 | | 21.9% | | 455.2 | | 21.2% | | 1,471.9 | | 21.9% | | 1,290.7 | | 21.7% |
Depreciation and amortization | 59.9 | | 2.5% | | 49.1 | | 2.3% | | 172.3 | | 2.5% | | 140.5 | | 2.4% |
Preopening expenses | 20.8 | | 0.9% | | 11.7 | | 0.5% | | 38.9 | | 0.6% | | 31.6 | | 0.6% |
| | | | | | | | | | | | | | | | |
Operating income | 210.6 | | 8.8% | | 228.3 | | 10.7% | | 610.3 | | 9.1% | | 625.3 | | 10.5% |
| | | | | | | | | | | | | | | | |
Interest expense, net | 15.8 | | 0.7% | | 13.8 | | 0.7% | | 56.7 | | 0.9% | | 39.4 | | 0.6% |
| | | | | | | | | | | | | | | | |
Income before income taxes | 194.8 | | 8.1% | | 214.5 | | 10.0% | | 553.6 | | 8.2% | | 585.9 | | 9.9% |
Provision for income taxes | 73.6 | | 3.0% | | 81.1 | | 3.8% | | 209.3 | | 3.1% | | 221.5 | | 3.8% |
| | | | | | | | | | | | | | | | |
Net income | | $ 121.2 | | 5.1% | | $ 133.4 | | 6.2% | | $ 344.3 | | 5.1% | | $ 364.4 | | 6.1% |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
Basic net income per share | $ 0.36 | | | | $ 0.40 | | | | $ 1.02 | | | | $ 1.08 | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
Diluted net income per share | $ 0.35 | | | | $ 0.39 | | | | $ 1.00 | | | | $ 1.06 | | |
Kohl's Corporation |
Condensed Consolidated Balance Sheets |
(In Thousands) |
(Unaudited) |
Subject to Reclassification |
| | | | | |
| | | November 1, 2003 | | November 2, 2002 |
| | | | | |
Assets | | | | | |
Current assets: | | | | | |
Cash and cash equivalents | | $ 108,532 | | $ 92,501 |
Accounts receivable trade, net | | 1,048,711 | | 975,512 |
Merchandise inventories | | | 2,424,802 | | 2,078,374 |
Deferred income taxes | | | 39.307 | | 46,513 |
Other current assets | | | 85,188 | | 48,868 |
Total current assets | | | 3,706,540 | | 3,241,768 |
| | | | | |
Property and equipment, net | | 3,137,052 | | 2,568,519 |
Favorable lease rights, net | | 183,809 | | 178,990 |
Goodwill, net | | | 9,338 | | 9,338 |
Other assets | | | 103,480 | | 94,397 |
Total assets | | | $ 7,140,219 | | $ 6,093,012 |
| | | | | |
Liabilities and Shareholders' Equity | | | | |
| | | | | |
Current liabilities: | | | | | |
Accounts payable | | | $ 1,118,091 | | $ 865,431 |
Accrued liabilities | | | 316,019 | | 267,819 |
Income taxes payable | | | 63,016 | | 46,533 |
Short-term debt | | 225,000 | | 225,000 |
Current portion of long-term debt and capital leases | | 12,611 | | 11,116 |
Total current liabilities | | | 1,734,737 | | 1,415,899 |
| | | | | |
Long-term debt and capital leases | | | 1,167,637 | | 1,236,940 |
Deferred income taxes | | | 228,418 | | 151,674 |
Other long-term liabilities | | 71,161 | | 61,523 |
Shareholders' equity | | | 3,938,266 | | 3,226,976 |
Total liabilities and shareholders' equity | $ 7,140,219 | | $ 6,093,012 |
Kohl's Corporation |
Condensed Consolidated Statements of Cash Flows |
(In Thousands) |
(Unaudited) |
Subject to Reclassification |
| | | | | | | | |
| | | | | | 9 Months Ended |
| | | | | | November 1, 2003 | | November 2, 2002 |
| | | | | | | | |
Operating activities | | | | | | |
| | | | | | | | |
Net income | | | | | $ 344,328 | | $ 364,430 |
Adjustments to reconcile net income to net cash | | | | |
provided by (used in) operating activities: | | | | | |
| Depreciation and amortization | | | 179,175 | | 141,144 |
| Amortization of debt discount | | | 3,521 | | 7,000 |
| Deferred income taxes | | | 73,853 | | 43,225 |
| Changes in operating assets and liabilities: | | | | |
| Accounts receivable | | | (57,901) | | (139,566) |
| Merchandise inventories | | | (797,806) | | (880,067) |
| Other current assets | | | (41,669) | | (7,468) |
| Accounts payable | | | 423,343 | | 386,561 |
| Accrued and other long-term liabilities | | 6,691 | | 22,823 |
| Income taxes | | | | (38,774) | | (35,402) |
| | | | | | | | |
Net cash provided by (used in) operating activities | | | 94,761 | | (97,320) |
| | | | | | | | |
Investing activities | | | | | | | |
| | | | | | | | |
Acquisition of property and equipment | | | | | |
and favorable lease rights, net | | | (530,197) | | (494,810) |
Net sales of short-term investments | | | 475,991 | | 229,377 |
Other | | | | | | (18,032) | | (21,982) |
Net cash used in investing activities | | (72,238) | | (287,415) |
| | | | | | | | |
Financing activities | | | | | | |
| | | | | | | | |
Proceeds from short-term debt | | | 225,000 | | 225,000 |
Net borrowings under revolving credit facility | | | 88,000 | | 133,500 |
Repayments of convertible and other long-term debt, net | | | (358,552) | | (15,026) |
Payments of financing fees on debt | | | (185) | | (950) |
Proceeds from stock option exercises | | | 41,661 | | 27,990 |
| | | | | | | | |
Net cash (used in) provided by financing activities | | (4,076) | | 370,514 |
| | | | | | | | |
Net increase (decrease) in cash and cash equivalents | | 18,447 | | (14,221) |
Cash and cash equivalents at beginning of period | | 90,085 | | 106,722 |
| | | | | | | | |
Cash and cash equivalents at end of period | | | $ 108,532 | | $ 92,501 |
