Exhibit 99.1
National & Retail Trades and First Call, Release: August 12, 2004 at 4:00 PM (EST)
KOHL'S CORPORATION REPORTS SECOND QUARTER NET INCOME INCREASE OF 39% AND EARNINGS PER SHARE OF $0.45
MENOMONEE FALLS, WI … August 12/BUSINESS WIRE/Kohl’s Corporation (NYSE:KSS). Kohl’s Corporation today reported net sales and earnings for the second quarter ended July 31, 2004.
Kohl’s Corporation reported a 39 percent increase in net income for the quarter ended July 31, 2004. Net income was $155.8 million, or $0.45 per diluted share compared with $112.1 million or $0.33 per diluted share a year ago. Net sales increased 13.1 percent to $2.5 billion for the quarter. Comparable store sales decreased 1.1 percent for the same period.
For the six months ended July 31, 2004, net income increased 21 percent to $269.6 million or $0.78 per diluted share, compared with $223.2 million or $0.65 per diluted share for the six months ended August 2, 2003. Net sales increased 12.8 percent to $4.9 billion from $4.3 billion a year ago. Comparable store sales decreased 0.5 percent for the same period.
Larry Montgomery, Kohl’s chairman and chief executive officer, said, “We have made significant progress on our 2004 initiatives as evidenced by our strong earnings performance for the quarter. We are very comfortable with the level and content of our inventory and the controls we have in place to maintain the appropriate level. At the same time, our in-store efforts to create a better shopping environment have been well received by the customer.”
Montgomery added, “We have seen continued improvement in the selling of new receipts throughout the second quarter. This fact, along with our planned new merchandise launches throughout the third quarter, gives us confidence that we will return to positive comparable store sales increases in the third quarter.”
Expansion Update
During the first half of the year, the Company successfully opened 47 new stores including entries into the Sacramento, CA; San Diego, CA; Fresno, CA; and Memphis, TN markets.
The Company now operates 589 stores in 38 states, compared with 492 stores in 34 states at the same time last year.
The Company plans to open another 48 stores in the third quarter of fiscal 2004, seven in August and 41 in October. The Company plans to enter the San Francisco, CA market with 11 stores; the Salt Lake City, UT market with five stores; the Rochester, NY market with three stores; the Portland, ME market with two stores; the Reno, NV market with two stores and the Montgomery, AL market with one store. In addition, the Company will add nine stores in the Midwest region, six stores in the Northeast region, five stores in the Southwest region, three stores in the South Central region and one store in the Southeast region. In total, the Company plans to open 95 stores in fiscal 2004.
In fiscal 2005, the Company plans to open another 95 stores with approximately half of the stores opening during the first quarter.
Second Quarter Earnings Conference Call
Investors will have the opportunity to listen to the second quarter earnings conference call today at 5:00 PM (EDT) by dialing 847-619-6368 ten minutes prior to the start of the call, over the Internet through the Company’s web site located athttp://www.kohls.com (see “Company News”), 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 15 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:9424524).
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 Contacts: Vicki Shamion, Director – Public Relations, (262) 703-1464
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KOHLS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In Millions, except per share date)
(Unaudited)
| | | | | | | | | | | | | | | | | |
| | | 3 Months Ended | | | | | | | | 6 Months Ended | | | | | | |
| | |
July 31, 2004 | | % to Net Sales | |
August 2, 2003 | | % to Net Sales | |
July 31, 2004 | | % to Net Sales | |
August 2, 2003 | | % to Net Sales |
| | | | | | | | | | | | | | | | | |
Net sales | | $ 2,497.9 | | | | $ 2,208.5 | | | | $ 4,878.0 | | | | $ 4,326.2 | | |
Cost of merchandise sold | | 1,587.9 | | 63.6% | | 1,471.7 | | 66.6% | | 3,120.5 | | 64.0% | | 2,848.1 | | 65.8% |
| | | | | | | | | | | | | | | | | |
Gross margin | | 910.0 | | 36.4% | | 736.8 | | 33.4% | | 1,757.5 | | 36.0% | | 1,478.1 | | 34.2% |
| | | | | | | | | | | | | | | | | |
Operating expenses | | | | | | | | | | | | | | | | |
Selling, general and administrative | | 569.1 | | 22.8% | | 473.8 | | 21.5% | | 1,134.8 | | 23.3% | | 948.0 | | 21.9% |
Depreciation and amortization | | 70.8 | | 2.8% | | 57.0 | | 2.6% | | 136.8 | | 2.8% | | 112.4 | | 2.7% |
Preopening expenses | | 4.7 | | 0.2% | | 2.5 | | 0.1% | | 22.5 | | 0.4% | | 18.0 | | 0.4% |
| | | | | | | | | | | | | | | | | |
Operating income | | 265.4 | | 10.6% | | 203.5 | | 9.2% | | 463.4 | | 9.5% | | 399.7 | | 9.2% |
| | | | | | | | | | | | | | | | | |
Interest expense, net | | 15.0 | | 0.6% | | 23.2 | | 1.0% | | 30.0 | | 0.6% | | 40.9 | | 0.9% |
| | | | | | | | | | | | | | | | | |
Income before income taxes | | 250.4 | | 10.0% | | 180.3 | | 8.2% | | 433.4 | | 8.9% | | 358.8 | | 8.3% |
Provision for income taxes | | 94.6 | | 3.8% | | 68.2 | | 3.1% | | 163.8 | | 3.4% | | 135.6 | | 3.1% |
| | | | | | | | | | | | | | | | | |
Net income | | $ 155.8 | | 6.2% | | $ 112.1 | | 5.1% | | $ 269.6 | | 5.5% | | $ 223.2 | | 5.2% |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Basic net income per share | | $ 0.46 | | | | $ 0.33 | | | | $ 0.79 | | | | $ 0.66 | | |
Avg. number of shares | | 341.0 | | | | 339.0 | | | | 340.7 | | | | 338.5 | | |
| | | | | | | | | | | | | | | | | |
Diluted net income per share | | $ 0.45 | | | | $ 0.33 | | | | $ 0.78 | | | | $ 0.65 | | |
Avg. number of shares | | 344.2 | | | | 343.7 | | | | 344.0 | | | | 343.1 | | |
| | |
| | |
KOHLS CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands)
(Unaudited)
Subject to Reclassification
| | | | | | |
| | | | July 31, 2004 | | August 2, 2003 |
| | | | | | |
Assets | | | | | |
Current assets: | | | | | |
Cash and cash equivalents | | | $ 105,173 | | $ 107,978 |
Short-term investments | | | 164,043 | | 35,036 |
Accounts receivable trade, net | | | 1,093,455 | | 950,142 |
Merchandise inventories | | | 1,776,212 | | 1,716,763 |
Deferred income taxes | | | 37,804 | | 34,146 |
Other | | | 82,501 | | 77,347 |
Total current assets | | | 3,259,188 | | 2,921,412 |
| | | | | | |
Property and equipment, net | | | 3,666,871 | | 2,980,460 |
Favorable lease rights, net | | | 230,533 | | 186,088 |
Goodwill | | | 9,338 | | 9,338 |
Other assets | | | 106,660 | | 101,887 |
Total assets | | | $ 7,272,590 | | $ 6,199,185 |
| | | | | | |
Liabilities and Shareholders' Equity | | | | | |
| | | | | | |
Current liabilities: | | | | | |
Accounts payable | | | $ 788,707 | | $ 701,852 |
Accrued liabilities | | | 443,346 | | 295,211 |
Income taxes payable | | | 106,977 | | 57,542 |
Current portion of long-term debt and capital leases | | | 2,843 | | 12,440 |
Total current liabilities | | | 1,341,873 | | 1,067,045 |
| | | | | | |
Long-term debt and capital leases | | | 1,091,421 | | 1,064,174 |
Deferred income taxes | | | 275,318 | | 205,257 |
Other long-term liabilities | | | 75,823 | | 69,245 |
Shareholders’ equity | | | 4,488,155 | | 3,793,464 |
Total liabilities and shareholders’ equity | | | $ 7,272,590 | | $ 6,199,185 |
KOHLS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
(Unaudited)
Subject to Reclassification
| | | | |
| | 6 Months Ended |
| | July 31, 2004 | | August 2, 2003 |
| | | | |
Operating activities | | | |
| | | | |
Net income | $ 269,569 | | $ 223,158 |
Adjustments to reconcile net income to net cash | | | |
provided by operating activities: | | | |
| | Depreciation and amortization | 137,160 | | 119,047 |
| | Amortization of debt discount | 108 | | 3,468 |
| | Deferred income taxes | 50,624 | | 55,853 |
| | Changes in operating assets and liabilities: | | | |
| | Accounts receivable, net | 56,702 | | 40,668 |
| | Merchandise inventories | (169,222) | | (89,767) |
| | Other current assets | (11,664) | | (33,633) |
| | Accounts payable | 256,108 | | 51,121 |
| | Accrued and other long-term liabilities | 5,198 | | (60,245) |
| | Income taxes | (17,395) | | (52,936) |
| | | | |
Net cash provided by operating activities | 577,188 | | 256,734 |
| | | | |
Investing activities | | | |
| | | | |
Acquisition of property and equipment | | | |
and favorable lease rights | (443,317) | | (334,646) |
Net (purchases) sales of short-term investments | (129,758) | | 440,955 |
Other | (16,359) | | (13,814) |
Net cash (used in) provided by investing activities | (589,434) | | 92,495 |
| | | | |
Financing activities | | | |
| | | | |
Repayments of convertible and other long-term debt | (11,559) | | (357,868) |
Payments of financing fees on debt | (62) | | (185) |
Proceeds from stock option exercises | 16,292 | | 26,717 |
| | | | |
Net cash provided by (used in) financing activities |
4,671 | | (331,336) |
| | | | |
Net (decrease) increase in cash and cash equivalents | (7,575) | | 17,893 |
Cash and cash equivalents at beginning of period | 112,748 | | 90,085 |
| | | | |
Cash and cash equivalents at end of period | $ 105,173 | | $ 107,978 |
