Exhibit 99.1
KOHL'S CORPORATION REPORTS SECOND QUARTER FISCAL 2010
DILUTED EARNINGS PER SHARE OF $0.84
·
Announces New Credit Card Agreement
MENOMONEE FALLS, WI … August 12/BUSINESS WIRE/Kohl’s Corporation (NYSE:KSS). Kohl’s Corporation today reported results for the quarter and six months ended July 31, 2010.
Kohl’s Corporation reported net income for the quarter ended July 31, 2010 of $260 million, or $0.84 per diluted share, compared with $229 million, or $0.75 per diluted share, a year ago. Net sales were $4.1 billion, an increase of 7.7 percent for the quarter. Comparable store sales for the quarter increased 4.6 percent.
For the six months ended July 31, 2010, net income increased 25 percent to $459 million, or $1.48 per diluted share, compared to $368 million, or $1.20 per diluted share, for the six months ended August 1, 2009. Net sales increased 9.3 percent to $8.1 billion from $7.4 billion a year ago. Comparable store sales increased 5.9 percent for the same period.
Kevin Mansell, Kohl’s chairman, president and chief executive officer, said “We are pleased with our financial results for the second quarter. We continue to gain market share as reflected in our performance in both comparable and total sales growth. This sales performance, along with strong inventory management, allowed us to continue to increase our gross margin rate. We are particularly pleased by our leverage in store payroll and marketing which offset our important long-term investment in e-commerce in the second quarter and resulted in us delivering a better overall expense result. “
Earnings Guidance
For the third quarter, the Company expects total sales to increase between 4.5 and 6.5 percent; comparable store sales to increase 2 to 4 percent; and gross margin as a percent of sales to increase 20 to 40 basis points over last year. The Company expects selling, general and administrative expenses to increase between 10 and 11 percent. This would result in earnings per diluted share of $0.57 to $0.63 for the third quarter.
For the fourth quarter, the Company expects total sales to increase between 4.5 and 6.5 percent; comparable store sales to increase 2 to 4 percent; and gross margin as a percent of sales to increase 20 to 40 basis points over last year. The Company expects selling, general and administrative expenses to increase between 3 and 4 percent. This would result in earnings per diluted share of $1.51 to $1.59 for the fourth quarter.
The Company’s updated guidance for fiscal 2010 is $3.57 to $3.70 per diluted share.
The Company filed a Current Report on Form 8-K today pertaining to a new credit card agreement and will discuss additional details on its earnings conference call this morning.
Second Quarter 2010 Earnings
Investors will have an opportunity to listen to the second quarter earnings conference call at 8:30 AM EDT on August 12 by dialing (706) 902-0486, using Conference ID 86532969. A replay of the call will also be accessible at approximately 9:30 AM EDT on August 12, until midnight EDT on September 12, 2010. To listen to the replay, dial (800) 642-1687 or (706) 645-9291, and use Conference ID 86532969.
In addition, the call will be web cast live over the Internet through the Company's web site located at http://www.kohlscorporation.com/InvestorRelations/event-calendar.htm. To participate in the conference, register at http://phx.corporate-ir.net/phoenix.zhtml?p=irol-eventDetails&c=60706&eventID=2807926 at least ten minutes prior to the call to down load and install any necessary audio software. The web cast will be available for 30 days.
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,” “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 projected in such forward-looking statements. Such risks and uncertainties include, but are not limited to, those that are described in Item 1A in Kohl’s most recent Annual Report on Form 10-K and as may be supplemented from time-to-time in Kohl's other filings with the SEC, all of which are expressly incorporated herein by reference.
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. By the end of September, Kohl’s will operate 1,089 stores in 49 states with a commitment to environmental leadership. In support of the communities it serves, Kohl’s has raised more than $150 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, visitwww.kohls.com.
Investor Relations: Wes McDonald, Chief Financial Officer, (262) 703-1893
Media: Vicki Shamion, Vice President – Public Relations, (262) 703-1464
KOHL'S CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In Millions, except per share data)
(Unaudited)
Subject to Reclassification
| | | | | |
| Three Months |
| (13 Weeks) Ended |
| | % to | | | % to |
| July 31, | Net | | August 1, | Net |
| 2010 | Sales | | 2009 | Sales |
| | | | | |
Net sales | $ 4,100 | | | $ 3,806 | |
Cost of merchandise sold | 2,449 | 59.7% | | 2,286 | 60.0% |
| | | | | |
Gross margin | 1,651 | 40.3% | | 1,520 | 40.0% |
| | | | | |
Operating expenses: | | | | | |
Selling, general, and administrative | 1,047 | 25.5% | | 966 | 25.4% |
Depreciation and amortization | 153 | 3.9% | | 144 | 3.8% |
Preopening expenses | 2 | - | | 11 | 0.3% |
| | | | | |
Operating income | 449 | 10.9% | | 399 | 10.5% |
| | | | | |
Interest expense, net | 31 | 0.7% | | 31 | 0.8% |
| | | | | |
Income before income taxes | 418 | 10.2% | | 368 | 9.7% |
Provision for income taxes | 158 | 3.9% | | 139 | 3.6% |
| | | | | |
| | | | | |
Net income | $ 260 | 6.3% | | 229 | 6.1% |
| | | | | |
| | | | | |
Basic net income per share | $ 0.84 | | | $ 0.76 | |
Average number of shares | 307 | | | 305 | |
| | | | | |
Diluted net income per share | $ 0.84 | | | $ 0.75 | |
Average number of shares | 308 | | | 306 | |
KOHL'S CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In Millions, except per share data)
(Unaudited)
Subject to Reclassification
| | | | | |
| Six Months |
| (26 Weeks) Ended |
| | % to | | | % to |
| July 31, | Net | | August 1, | Net |
| 2010 | Sales | | 2009 | Sales |
| | | | | |
Net sales | $ 8,135 | | | $ 7,445 | |
Cost of merchandise sold | 4,948 | 60.8% | | 4,556 | 61.2% |
| | | | | |
Gross margin | 3,187 | 39.2% | | 2,889 | 38.8% |
| | | | | |
Operating expenses: | | | | | |
Selling, general, and administrative | 2,077 | 25.5% | | 1,927 | 25.9% |
Depreciation and amortization | 304 | 3.8% | | 285 | 3.8% |
Preopening expenses | 6 | 0.1% | | 26 | 0.4% |
| | | | | |
Operating income | 800 | 9.8% | | 651 | 8.7% |
| | | | | |
Interest expense, net | 62 | 0.8% | | 62 | 0.8% |
| | | | | |
Income before income taxes | 738 | 9.0% | | 589 | 7.9% |
Provision for income taxes | 279 | 3.4% | | 221 | 3.0% |
| | | | | |
| | | | | |
Net income | $ 459 | 5.6% | | $ 368 | 4.9% |
| | | | | |
| | | | | |
Basic net income per share | $ 1.49 | | | $ 1.21 | |
Average number of shares | 307 | | | 305 | |
| | | | | |
Diluted net income per share | $ 1.48 | | | $ 1.20 | |
Average number of shares | 308 | | | 306 | |
| | | | | |
KOHL'S CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Millions)
(Unaudited)
Subject to Reclassification
| | | |
| | | |
| July 31, | | August 1, |
| 2010 | | 2009 |
Assets | | | |
Current assets: | | | |
Cash and cash equivalents | $ 2,518 | | $ 1,310 |
Merchandise inventories | 2,930 | | 2,724 |
Deferred income taxes | 95 | | �� 72 |
Other | 227 | | 201 |
| | | |
Total current assets | 5,770 | | 4,307 |
| | | |
Property and equipment, net | 7,310 | | 7,142 |
Long-term investments | 298 | | 326 |
Favorable lease rights, net | 198 | | 196 |
Other assets | 130 | | 115 |
| | | |
Total assets | $ 13,706 | | $ 12,086 |
| | | |
Liabilities and Shareholders' Equity | | | |
| | | |
Current liabilities: | | | |
Accounts payable | $ 1,345 | | $ 1,153 |
Accrued liabilities | 994 | | 900 |
Income taxes payable | 35 | | 59 |
Current portion of long-term | | | |
debt and capital leases | 319 | | 16 |
| | | |
Total current liabilities | 2,693 | | 2,128 |
| | | |
Long-term debt and capital leases | 1,766 | | 2,053 |
Deferred income taxes | 365 | | 333 |
Other long-term liabilities | 505 | | 436 |
Shareholders' equity | 8,377 | | 7,136 |
Total liabilities and shareholders' equity | $ 13,706 | | $ 12,086 |
| | | |
KOHL'S CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Millions)
(Unaudited)
Subject to Reclassification
| | | |
| Six Months |
| (26 Weeks) Ended |
| July 31, | | August 1, |
| 2010 | | 2009 |
| | | |
Operating activities | | | |
Net income | $ 459 | | $ 368 |
Adjustments to reconcile net income to net cash | | | |
provided by operating activities: | | | |
Depreciation and amortization, | | | |
including debt discount and deferred financing fees | 305 | | 285 |
Share-based compensation | 32 | | 27 |
Excess tax benefits from share-based compensation | 2 | | - |
Deferred income taxes | (33) | | 15 |
Other non-cash revenues and expenses | 19 | | 36 |
Changes in operating assets and liabilities: | | | |
Merchandise inventories | (5) | | 77 |
Other current and long-term assets | (6) | | 9 |
Accounts payable | 158 | | 272 |
Accrued and other long-term liabilities | (154) | | (38) |
Income taxes | (149) | | (50) |
| | | |
Net cash provided by operating activities | 628 | | 1,001 |
| | | |
Investing activities | | | |
Acquisition of property and equipment | | | |
and favorable lease rights | (421) | | (336) |
Sales of investments in auction rate securities | 20 | | 8 |
Other | 2 | | (1) |
| | | |
Net cash used in investing activities | (399) | | (329) |
| | | |
Financing activities | | | |
Treasury stock purchases | (3) | | (1) |
Capital lease payments | (9) | | (8) |
Proceeds from stock option exercises | 36 | | 4 |
Excess tax benefits from share-based compensation | (2) | | - |
| | | |
Net cash provided by (used in) financing activities | 22 | | (5) |
| | | |
Net increase in cash and cash equivalents | 251 | | 667 |
Cash and cash equivalents at beginning of period | 2,267 | | 643 |
| | | |
Cash and cash equivalents at end of period | $ 2,518 | | $ 1,310 |
| | | |
