Exhibit 99.1
National & Retail Trades and First Call, Release: November 11, 2004 at 4:00 PM (EST)
KOHL'S CORPORATION REPORTS THIRD QUARTER EARNINGS
MENOMONEE FALLS, WI … November 11/BUSINESS WIRE/Kohl’s Corporation (NYSE:KSS). Kohl’s Corporation today reported results for the three months and nine months ended October 30, 2004.
Kohl’s Corporation reported an 18.7 percent increase in net income for the quarter ended October 30, 2004. Net income was $143.8 million, or $0.42 per diluted share, compared with $121.2 million or $0.35 per diluted share a year ago. Net sales increased to $2.7 billion from $2.4 billion a year ago, an increase of 14.6 percent for the quarter. Comparable store sales increased 1.2 percent for the same period.
For the nine months ended October 30, 2004, net income increased 20.0 percent to $413.3 million or $1.20 per diluted share, compared with $344.3 million or $1.00 per diluted share a year ago. Net sales increased 13.4 percent to $7.6 billion from $6.7 billion a year ago. Comparable store sales were flat to last year.
Larry Montgomery, Kohl’s chairman and chief executive officer, said, “We are pleased with the progress made on the four initiatives we have been focused on all year. We are particularly excited about the customers’ response to the new merchandise launches in the third quarter. We believe we are well-positioned for the holiday season in terms of content and level of inventory, our in-store shopping environment and our marketing and advertising calendar.”
Montgomery added, “I am very proud of our over 100,000 associates and the role they played in helping the company achieve a successful third quarter and want to thank them for their hard work and dedication to serving our customers.”
Expansion Update
The Company successfully opened 48 new stores during the quarter. The Company entered 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 added 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.
The Company now operates 637 stores in 40 states, compared with 542 stores in 36 states at the same time last year.
The Company plans to open approximately 95 stores in fiscal 2005 with approximately 33 stores opening during the first quarter.
Third Quarter Earnings Conference Call
Investors will have the opportunity to listen to the third quarter earnings conference call today at 5:00 PM (EST) 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 36-hour telephone replay of the call, simply dial 630-652-3018. (Pass Code: 10045878).
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: Vicki Shamion, Director – Public Relations, (262) 703-1464
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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 |
| | |
October 30, 2004 | % to Net Sales |
November 1, 2003 | % to Net Sales |
October 30, 2004 | % to Net Sales |
November 1, 2003 | % to Net Sales |
| | | | | | | | | | | | | | | | | |
Net sales | | $ 2,743.9 | | | | $ 2,394.0 | | | | $ 7,621.9 | | | | $ 6,720.2 | | |
Cost of merchandise sold | 1,758.3 | | 64.1% | | 1,578.7 | | 65.9% | | 4,878.9 | | 64.0% | | 4,426.8 | | 65.9% |
| | | | | | | | | | | | | | | | | |
Gross margin | 985.6 | | 35.9% | | 815.3 | | 34.1% | | 2,743.0 | | 36.0% | | 2,293.4 | | 34.1% |
| | | | | | | | | | | | | | | | |
Operating expenses | | | | | | | | | | | | | | | |
Selling, general and administrative | 646.5 | | 23.6% | | 524.0 | | 21.9% | | 1,781.3 | | 23.4% | | 1,471.9 | | 21.9% |
Depreciation and amortization | 71.6 | | 2.6% | | 59.9 | | 2.5% | | 208.3 | | 2.7% | | 172.3 | | 2.6% |
Preopening expenses | 21.3 | | 0.7% | | 20.8 | | 0.9% | | 43.8 | | 0.6% | | 38.9 | | 0.5% |
| | | | | | | | | | | | | | | | | |
Operating income | 246.2 | | 9.0% | | 210.6 | | 8.8% | | 709.6 | | 9.3% | | 610.3 | | 9.1% |
| | | | | | | | | | | | | | | | | |
Interest expense, net | 15.0 | | 0.6% | | 15.8 | | 0.7% | | 45.1 | | 0.6% | | 56.7 | | 0.9% |
| | | | | | | | | | | | | | | | | |
Income before income taxes | 231.2 | | 8.4% | | 194.8 | | 8.1% | | 664.5 | | 8.7% | | 553.6 | | 8.2% |
Provision for income taxes | 87.4 | | 3.2% | | 73.6 | | 3.0% | | 251.2 | | 3.3% | | 209.3 | | 3.1% |
| | | | | | | | | | | | | | | | | |
Net income | | $ 143.8 | | 5.2% | | $ 121.2 | | 5.1% | | $ 413.3 | | 5.4% | | $ 344.3 | | 5.1% |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Basic net income per share | $ 0.42 | | | | $ 0.36 | | | | $ 1.21 | | | | $ 1.02 | | |
Avg. number of shares | | 342.3 | | | | 339.8 | | | | 341.3 | | | | 338.9 | | |
| | | | | | | | | | | | | | | | | |
Diluted net income per share | | $ 0.42 | | | | $ 0.35 | | | | $ 1.20 | | | | $ 1.00 | | |
Avg. number of shares | | 344.9 | | | | 344.4 | | | | 343.7 | | | | 343.4 | | |
| | |
| | |
Kohl's Corporation |
Condensed Consolidated Balance Sheets |
(In Thousands) |
(Unaudited) |
Subject to Reclassification |
| | | | | | |
| | | | October 30, 2004 | | November 1, 2003 |
| | | | | | |
Assets | | | | | |
Current assets: | | | | | |
Cash and cash equivalents | | $ 111,720 | | $ 108,532 |
Accounts receivable trade, net | | 1,284,734 | | 1,048,711 |
Merchandise inventories | | | 2,640,348 | | 2,424,802 |
Deferred income taxes | | | 40,953 | | 39,307 |
Other | | | 77,919 | | 85,454 |
Total current assets | | | 4,155,674 | | 3,706,806 |
| | | | | | |
Property and equipment, net | | 3,844,858 | | 3,137,052 |
Favorable lease rights, net | | 228,030 | | 183,809 |
Goodwill | | | 9,338 | | 9,338 |
Other assets | | | 106,774 | | 103,480 |
Total assets | | | $ 8,344,674 | | 7,140,485 |
| | | | | | |
Liabilities and Shareholders' Equity | | | | |
| | | | | | |
Current liabilities: | | | | | |
Accounts payable | | | $ 1,346,486 | | $ 1,118,091 |
Accrued liabilities | | | 447,422 | | 316,285 |
Income taxes payable | | | 9,507 | | 63,016 |
Short-term debt | | 354,000 | | 313,000 |
Current portion of long-term debt and capital leases | | 3,380 | | 12,611 |
Total current liabilities | | | 2,160,795 | | 1,823,003 |
| | | | | | |
Long-term debt and capital leases | | | 1,104,283 | | 1,079,637 |
Deferred income taxes | | | 318,461 | | 228,418 |
Other long-term liabilities | | 77,714 | | 71,161 |
Shareholders’ equity | | | 4,683,421 | | 3,938,266 |
Total liabilities and shareholders’ equity | $ 8,344,674 | | $ 7,140,485 |
Kohl's Corporation |
Condensed Consolidated Statements of Cash Flows |
(In Thousands) |
(Unaudited) |
Subject to Reclassification |
| | | | | | | | | |
| | | | | | | 9 Months Ended |
| | | | | | | October 30, 2004 | | November 1, 2003 |
| | | | | | | | | |
Operating activities | | | | | | |
| | | | | | | | | |
Net income | | | | | $ 413,345 | | $ 344,328 |
Adjustments to reconcile net income to net cash | | | | |
provided by operating activities: | | | | | |
| | Depreciation and amortization | | | 208,883 | | 179,175 |
| | Amortization of debt discount | | | 161 | | 3,521 |
| | Deferred income taxes | | | 90,618 | | 73,853 |
| | Changes in operating assets and liabilities: | | | | |
| | Accounts receivable, net | | | (134,577) | | (57,901) |
| | Merchandise inventories | | | (1,033,358) | | (797,806) |
| | Other current assets | | | (7,082) | | (41,740) |
| | Accounts payable | | | 813,887 | | 467,360 |
| | Accrued and other long-term liabilities | | 11,165 | | (37,255) |
| | Income taxes | | | | (89,107) | | (38,774) |
| | | | | | | | | |
Net cash provided by operating activities | | | 273,935 | | 94,761 |
| | | | | | | | | |
Investing activities | | | | | | | |
| | | | | | | | | |
Acquisition of property and equipment | | | | | |
and favorable lease rights | | | (669,266) | | (530,197) |
Net sales of short-term investments | | | 34,285 | | 475,991 |
Other | | | | | | (23,533) | | (18,032) |
Net cash used in investing activities | | (658,514) | | (72,238) |
| | | | | | | | | |
Financing activities | | | | | | |
| | | | | | | | | |
Net borrowings under credit facilities | | | 354,000 | | 313,000 |
Payments of convertible and other long-term debt | | | (12,400) | | (358,552) |
Payments of financing fees on debt | | | (73) | | (185) |
Proceeds from stock option exercises | | | 42,024 | | 41,661 |
| | | | | | | | | |
Net cash provided by (used in) financing activities | |
383,551 | | (4,076) |
| | | | | | | | | |
Net (decrease) increase in cash and cash equivalents | | (1,028) | | 18,447 |
Cash and cash equivalents at beginning of period | | 112,748 | | 90,085 |
| | | | | | | | | |
Cash and cash equivalents at end of period | | | $ 111,720 | | $ 108,532 |
