Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Apr. 30, 2022 | May 27, 2022 | |
Document Information [Line Items] | ||
Entity Registrant Name | KOHL’S CORP | |
Entity Central Index Key | 0000885639 | |
Current Fiscal Year End Date | --01-28 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Apr. 30, 2022 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 128,461,480 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Incorporation, State or Country Code | WI | |
Entity Tax Identification Number | 39-1630919 | |
Entity File Number | 1-11084 | |
Entity Address, Address Line One | N56 W17000 Ridgewood Drive | |
Entity Address, City or Town | Menomonee Falls | |
Entity Address, State or Province | WI | |
Entity Address, Postal Zip Code | 53051 | |
City Area Code | 262 | |
Local Phone Number | 703-7000 | |
Common Stock, $.01 par value [Member] | ||
Document Information [Line Items] | ||
Title of each class | Common Stock, $.01 par value | |
Trading Symbol(s) | KSS | |
Name of each exchange on which registered | NYSE | |
Preferred Stock Purchase Rights [Member] | ||
Document Information [Line Items] | ||
Title of each class | Preferred Stock Purchase Rights | |
No Trading Symbol Flag | true | |
Name of each exchange on which registered | NYSE |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Apr. 30, 2022 | Jan. 29, 2022 | May 01, 2021 |
Current assets: | |||
Cash and cash equivalents | $ 646 | $ 1,587 | $ 1,609 |
Merchandise inventories | 3,736 | 3,067 | 2,667 |
Other | 381 | 369 | 919 |
Total current assets | 4,763 | 5,023 | 5,195 |
Property and equipment, net | 7,790 | 7,304 | 6,653 |
Operating leases | 2,224 | 2,248 | 2,392 |
Other assets | 476 | 479 | 449 |
Total assets | 15,253 | 15,054 | 14,689 |
Current liabilities: | |||
Accounts payable | 1,679 | 1,683 | 1,378 |
Accrued liabilities | 1,316 | 1,340 | 1,289 |
Current portion of: | |||
Long-term debt | 164 | ||
Finance lease and financing obligations | 108 | 118 | 112 |
Operating leases | 127 | 145 | 159 |
Total current liabilities | 3,394 | 3,286 | 2,938 |
Long-term debt | 1,746 | 1,910 | 1,909 |
Finance lease and financing obligations | 2,584 | 2,133 | 1,473 |
Operating leases | 2,474 | 2,479 | 2,620 |
Deferred income taxes | 209 | 206 | 242 |
Other long-term liabilities | 390 | 379 | 390 |
Shareholders’ equity: | |||
Common stock | 4 | 4 | 4 |
Paid-in capital | 3,395 | 3,375 | 3,333 |
Treasury stock, at cost | (13,150) | (12,975) | (11,663) |
Retained earnings | 14,207 | 14,257 | 13,443 |
Total shareholders’ equity | 4,456 | 4,661 | 5,117 |
Total liabilities and shareholders’ equity | $ 15,253 | $ 15,054 | $ 14,689 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Millions | 3 Months Ended | |
Apr. 30, 2022 | May 01, 2021 | |
Total revenue | $ 3,715 | $ 3,887 |
Cost of merchandise sold | 2,140 | 2,233 |
Operating expenses: | ||
Selling, general, and administrative | 1,293 | 1,170 |
Depreciation and amortization | 200 | 211 |
Operating income | 82 | 273 |
Interest expense, net | 68 | 67 |
Loss on extinguishment of debt | 201 | |
Income before income taxes | 14 | 5 |
(Benefit) for income taxes | (9) | |
Net income | $ 14 | $ 14 |
Net income per share: | ||
Basic | $ 0.11 | $ 0.09 |
Diluted | $ 0.11 | $ 0.09 |
Net Sales [Member] | ||
Total revenue | $ 3,471 | $ 3,662 |
Other Revenue [Member] | ||
Total revenue | $ 244 | $ 225 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) $ in Millions | Total | Common Stock [Member] | Paid-In Capital [Member] | Treasury Stock [Member] | Retained Earnings [Member] |
Balance, beginning of period at Jan. 30, 2021 | $ 4 | $ 3,319 | $ (11,595) | $ 13,468 | |
Treasury stock purchases | (46) | ||||
Stock-based awards | 14 | (22) | |||
Net income | $ 14 | 14 | |||
Dividends paid | (39) | ||||
Balance, end of period at May. 01, 2021 | $ 5,117 | $ 4 | 3,333 | $ (11,663) | 13,443 |
Shares, beginning of period at Jan. 30, 2021 | 377 | (219) | |||
Treasury stock purchases | (1) | ||||
Shares, end of period at May. 01, 2021 | 157 | 377 | (220) | ||
Dividends paid per common share | $ 0.25 | ||||
Balance, beginning of period at Jan. 29, 2022 | $ 4,661 | $ 4 | 3,375 | $ (12,975) | 14,257 |
Treasury stock purchases | (158) | ||||
Stock-based awards | 20 | (18) | |||
Net income | 14 | 14 | |||
Dividends paid | 1 | (64) | |||
Balance, end of period at Apr. 30, 2022 | $ 4,456 | $ 4 | $ 3,395 | $ (13,150) | $ 14,207 |
Shares, beginning of period at Jan. 29, 2022 | 377 | (246) | |||
Treasury stock purchases | (3) | ||||
Shares, end of period at Apr. 30, 2022 | 128 | 377 | (249) | ||
Dividends paid per common share | $ 0.50 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 3 Months Ended | |
Apr. 30, 2022 | May 01, 2021 | |
Operating activities | ||
Net income | $ 14 | $ 14 |
Adjustments to reconcile net income to net cash (Used in) provided by operating activities: | ||
Depreciation and amortization | 200 | 211 |
Share-based compensation | 18 | 12 |
Deferred income taxes | 2 | (65) |
Loss on extinguishment of debt | 201 | |
Non-cash lease expense | 31 | 38 |
Other non-cash expense | 3 | 7 |
Changes in operating assets and liabilities: | ||
Merchandise inventories | (668) | (75) |
Other current and long-term assets | (42) | (31) |
Accounts payable | (4) | (99) |
Accrued and other long-term liabilities | 17 | 42 |
Operating lease liabilities | (31) | (39) |
Net cash (used in) provided by operating activities | (460) | 278 |
Investing activities | ||
Acquisition of property and equipment | (221) | (59) |
Proceeds from sale of real estate | 4 | 2 |
Net cash used in investing activities | (217) | (57) |
Financing activities | ||
Proceeds from issuance of debt | 500 | |
Deferred financing costs | (5) | |
Treasury stock purchases | (158) | (46) |
Shares withheld for taxes on vested restricted shares | (18) | (22) |
Dividends paid | (63) | (39) |
Reduction of long-term borrowings | (1,044) | |
Premium paid on redemption of debt | (192) | |
Finance lease and financing obligation payments | (29) | (33) |
Proceeds from financing obligations | 4 | |
Proceeds from stock option exercises | 1 | |
Other | (3) | |
Net cash used in provided by financing activities | (264) | (883) |
Net decrease in cash and cash equivalents | (941) | (662) |
Cash and cash equivalents at beginning of period | 1,587 | 2,271 |
Cash and cash equivalents at end of period | 646 | 1,609 |
Supplemental information | ||
Interest paid, net of capitalized interest | 45 | 59 |
Income taxes paid | $ 5 | $ 5 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Apr. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | 1. Basis of Presentation The accompanying Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for fiscal year end Consolidated Financial Statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. For further information, refer to the Consolidated Financial Statements and related footnotes included in our Annual Report on Form 10-K for the fiscal year ended January 29, 2022 (Commission File No. 1-11084) as filed with the Securities and Exchange Commission. Due to the seasonality of the business of Kohl’s Corporation (the “Company,” “Kohl’s,” “we,” “our,” or “us”), results for any quarter are not necessarily indicative of the results that may be achieved for a full fiscal year. We operate as a single business unit. Recent Accounting Pronouncements We do not expect that any recently issued accounting pronouncements will have a material impact on our Consolidated Financial Statements. |
Revenue Recognition
Revenue Recognition | 3 Months Ended |
Apr. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | 2. Revenue Recognition The following table summarizes net sales by line of business: Quarter Ended (Dollars in Millions) April 30, 2022 May 1, 2021 Women's $ 1,077 $ 1,117 Men's 710 687 Home 525 634 Children's 411 468 Accessories 390 368 Footwear 358 388 Net Sales $ 3,471 $ 3,662 Unredeemed gift cards and merchandise return card liabilities totaled $ 312 million as of April 30, 2022, $ 353 million as of January 29, 2022, and $ 298 million as of May 1, 2021. Net sales of $ 74 million were recognized during the current year from gift cards redeemed in 2022 and issued in prior years. |
Debt
Debt | 3 Months Ended |
Apr. 30, 2022 | |
Debt Disclosure [Abstract] | |
Debt | 3. Debt Long-term debt, which includes draws on the revolving credit facility, consists of the following unsecured debt: Outstanding Maturity (Dollars in Millions) Effective Rate Coupon Rate April 30, January 29, May 1, 2023 3.25 % 3.25 % $ 164 $ 164 $ 164 2023 4.78 % 4.75 % 111 111 111 2025 9.50 % 9.50 % 113 113 113 2025 4.25 % 4.25 % 353 353 353 2029 7.36 % 7.25 % 42 42 42 2031 3.40 % 3.38 % 500 500 500 2033 6.05 % 6.00 % 112 112 112 2037 6.89 % 6.88 % 101 101 101 2045 5.57 % 5.55 % 427 427 427 Outstanding unsecured senior debt 1,923 1,923 1,923 Unamortized debt discounts and deferred financing costs ( 13 ) ( 13 ) ( 14 ) Current portion of unsecured senior debt ( 164 ) — — Long-term unsecured senior debt $ 1,746 $ 1,910 $ 1,909 Effective interest rate 4.89 % 4.89 % 4.89 % Our unsecured senior long-term debt is classified as Level 1, financial instruments with unadjusted, quoted prices listed on active market exchanges. The estimated fair value of our unsecured senior debt was $ 1.9 billion at April 30, 2022, $ 2.0 billion at January 29, 2022, and $ 2.1 billion at May 1, 2021. Our various debt agreements contain covenants including limitations on additional indebtedness and certain financial tests. As of April 30, 2022, we were in compliance with all covenants of the various debt agreements. |
Leases
Leases | 3 Months Ended |
Apr. 30, 2022 | |
Leases [Abstract] | |
Leases | 4. Leases We lease certain property and equipment used in our operations. Some of our store leases include additional rental payments based on a percentage of sales over contractual levels or which are adjusted periodically for inflation. Our typical store lease has an initial term of 20 to 25 years and four to eight five-year renewal options. Lease assets represent our right to use an underlying asset for the lease term. Lease assets are recognized at commencement date based on the value of the lease liability and are adjusted for any lease payments made to the lessor at or before commencement date, minus any lease incentives received and any initial direct costs incurred by the lessee. Lease liabilities represent our contractual obligation to make lease payments. At the commencement date, the lease liabilities equal the present value of minimum lease payments over the lease term. As the implicit interest rate is not readily identifiable in our leases, we estimate our collateralized borrowing rate to calculate the present value of lease payments. Leases with a term of 12 months or less are excluded from the balance; we recognize lease expense for these leases on a straight-line basis over the lease term. We combine lease and non-lease components for new and modified leases. We opened an additional 48 Sephora shop-in-shops within our Kohl's stores during the first quarter of 2022, bringing the total number of Sephora shop-in-shops to 248 . We plan to open an additional 352 shop-in-shops during the remainder of 2022, as well as 250 more in 2023. Due to the investments we are making in the shop-in-shops, we reassessed our lease term when construction began as these assets will have significant economic value to us when the lease term becomes exercisable. The impact of these assessments resulted in additional lease term, additional lease assets and liabilities, and, in some cases, changes to the classification. The following tables summarize our operating and finance leases and where they are presented in our Consolidated Financial Statements: Consolidated Balance Sheets (Dollars in Millions) Classification April 30, January 29, May 1, Assets Operating leases Operating leases $ 2,224 $ 2,248 $ 2,392 Finance leases Property and equipment, net 1,883 1,442 792 Total operating and finance leases 4,107 3,690 3,184 Liabilities Current Operating leases Current portion of operating leases 127 145 159 Finance leases Current portion of finance leases and financing obligations 82 87 74 Noncurrent Operating leases Operating leases 2,474 2,479 2,620 Finance leases Finance leases and financing obligations 2,140 1,688 1,019 Total operating and finance leases $ 4,823 $ 4,399 $ 3,872 Consolidated Statement of Operations Quarter Ended (Dollars in Millions) Classification April 30, 2022 May 1, 2021 Operating leases Selling, general, and administrative $ 69 $ 77 Finance leases Amortization of leased assets Depreciation and amortization 29 20 Interest on leased assets Interest expense, net 32 25 Total operating and finance leases $ 130 $ 122 Consolidated Statement of Cash Flows Quarter Ended (Dollars in Millions) April 30, 2022 May 1, 2021 Cash paid for amounts included in the measurement of leased liabilities Operating cash flows from operating leases $ 70 $ 84 Operating cash flows from finance leases 30 25 Financing cash flows from finance leases 22 24 The following table summarizes future lease payments by fiscal year: April 30, 2022 (Dollars in millions) Operating Leases Finance Leases Total 2022 $ 195 $ 146 $ 341 2023 260 204 464 2024 235 195 430 2025 226 189 415 2026 219 188 407 After 2026 3,384 3,309 6,693 Total lease payments $ 4,519 $ 4,231 $ 8,750 Amount representing interest ( 1,918 ) ( 2,009 ) ( 3,927 ) Lease liabilities $ 2,601 $ 2,222 $ 4,823 The following table summarizes weighted-average remaining lease term and discount rate: April 30, 2022 January 29, 2022 Weighted-average remaining term (years) Operating leases 20 20 Finance leases 20 20 Weighted-average discount rate Operating leases 6 % 6 % Finance leases 6 % 7 % Other lease information is as follows: Quarter Ended (Dollars in Millions) April 30, 2022 May 1, 2021 Property and equipment acquired through exchange of: Finance lease liabilities $ 472 $ 106 Operating lease liabilities 11 30 Financing Obligations The following tables summarize our financing obligations and where they are presented in our Consolidated Financial Statements: Consolidated Balance Sheets (Dollars in millions) Classification April 30, January 29, May 1, Assets Financing obligations Property and equipment, net $ 53 $ 55 $ 62 Liabilities Current Current portion of finance leases and financing obligations 26 31 38 Noncurrent Finance leases and financing obligations 444 445 454 Total financing obligations $ 470 $ 476 $ 492 Consolidated Statement of Operations Quarter Ended (Dollars in Millions) Classification April 30, 2022 May 1, 2021 Amortization of financing obligation assets Depreciation and amortization 2 2 Interest on financing obligations Interest expense, net 12 9 Total financing obligations $ 14 $ 11 Consolidated Statement of Cash Flows Quarter Ended (Dollars in Millions) April 30, 2022 May 1, 2021 Cash paid for amounts included in the measurement of financing obligations Operating cash flows from financing obligations $ 12 $ 9 Financing cash flows from financing obligations 7 9 Proceeds from financing obligations 4 — The following table summarizes future financing obligation payments by fiscal year: April 30, 2022 (Dollars in millions) Financing Obligations 2022 $ 55 2023 73 2024 69 2025 64 2026 60 After 2026 648 Total lease payments $ 969 Non-cash gain on future sale of property 185 Amount representing interest ( 684 ) Financing obligation liability $ 470 The following table summarizes the weighted-average remaining term and discount rate for financing obligations: April 30, 2022 January 29, 2022 Weighted-average remaining term (years) 12 10 Weighted-average discount rate 11 % 9 % |
Stock-Based Awards
Stock-Based Awards | 3 Months Ended |
Apr. 30, 2022 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Awards | 5. Stock-Based Awards The following table summarizes our stock-based awards activity for the quarter ended April 30, 2022: Stock Options Nonvested Stock Awards Performance Share Units (Shares and Units in Thousands) Shares Weighted Shares Weighted Units Weighted Balance - January 29, 2022 12 $ 48.66 2,769 $ 36.17 856 $ 42.74 Granted — — 573 60.00 215 69.58 Exercised/vested — — ( 790 ) 37.50 — — Forfeited/expired — — ( 32 ) 41.20 — — Balance - April 30, 2022 12 $ 48.66 2,520 $ 41.11 1,071 $ 48.12 In 2019, we issued 1,747,441 stock warrants. The total vested and unvested warrants as of April 30, 2022 were 1,048,465 and 698,976 , respectively. |
Contingencies
Contingencies | 3 Months Ended |
Apr. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | 6. Contingencies We are subject to certain legal proceedings and claims arising out of the conduct of our business. In the opinion of management, the outcome of these proceedings and litigation will not have a material adverse impact on our Consolidated Financial Statements. |
Income Taxes
Income Taxes | 3 Months Ended |
Apr. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 7. Income Taxes The first quarter of both 2022 and 2021 resulted in a net benefit for income taxes driven by the recognition of favorable tax items. The net benefit, when compared to a low pre-tax income, results in a negative tax rate. |
Net Income Per Share
Net Income Per Share | 3 Months Ended |
Apr. 30, 2022 | |
Earnings Per Share [Abstract] | |
Net Income Per Share | 8. Net Income Per Share Basic Net income per share is Net income divided by the average number of common shares outstanding during the period. Diluted Net income per share includes incremental shares assumed for share-based awards and stock warrants. Potentially dilutive shares include stock options, unvested restricted stock units and awards, and warrants outstanding during the period, using the treasury stock method. Potentially dilutive shares are excluded from the computations of diluted earnings per share (“EPS”) if their effect would be anti-dilutive. The information required to compute basic and diluted Net income per share is as follows: Quarter Ended (Dollar and Shares in Millions, Except per Share Data) April 30, 2022 May 1, 2021 Numerator—Net income $ 14 $ 14 Denominator—Weighted-average shares: Basic 127 154 Dilutive impact 2 2 Diluted 129 156 Net income per share: Basic $ 0.11 $ 0.09 Diluted $ 0.11 $ 0.09 The following potential shares of common stock were excluded from the diluted Net income per share calculation because their effect would have been anti-dilutive: Quarter Ended (Shares in Millions) April 30, 2022 May 1, 2021 Anti-dilutive shares 3 3 |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 3 Months Ended |
Apr. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements We do not expect that any recently issued accounting pronouncements will have a material impact on our Consolidated Financial Statements. |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 3 Months Ended |
Apr. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Net Sales by Line of Business | The following table summarizes net sales by line of business: Quarter Ended (Dollars in Millions) April 30, 2022 May 1, 2021 Women's $ 1,077 $ 1,117 Men's 710 687 Home 525 634 Children's 411 468 Accessories 390 368 Footwear 358 388 Net Sales $ 3,471 $ 3,662 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Apr. 30, 2022 | |
Debt Disclosure [Abstract] | |
Components of Long-term Debt | Long-term debt, which includes draws on the revolving credit facility, consists of the following unsecured debt: Outstanding Maturity (Dollars in Millions) Effective Rate Coupon Rate April 30, January 29, May 1, 2023 3.25 % 3.25 % $ 164 $ 164 $ 164 2023 4.78 % 4.75 % 111 111 111 2025 9.50 % 9.50 % 113 113 113 2025 4.25 % 4.25 % 353 353 353 2029 7.36 % 7.25 % 42 42 42 2031 3.40 % 3.38 % 500 500 500 2033 6.05 % 6.00 % 112 112 112 2037 6.89 % 6.88 % 101 101 101 2045 5.57 % 5.55 % 427 427 427 Outstanding unsecured senior debt 1,923 1,923 1,923 Unamortized debt discounts and deferred financing costs ( 13 ) ( 13 ) ( 14 ) Current portion of unsecured senior debt ( 164 ) — — Long-term unsecured senior debt $ 1,746 $ 1,910 $ 1,909 Effective interest rate 4.89 % 4.89 % 4.89 % |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Apr. 30, 2022 | |
Leases [Abstract] | |
Summary of Operating and Finance Leases | The following tables summarize our operating and finance leases and where they are presented in our Consolidated Financial Statements: Consolidated Balance Sheets (Dollars in Millions) Classification April 30, January 29, May 1, Assets Operating leases Operating leases $ 2,224 $ 2,248 $ 2,392 Finance leases Property and equipment, net 1,883 1,442 792 Total operating and finance leases 4,107 3,690 3,184 Liabilities Current Operating leases Current portion of operating leases 127 145 159 Finance leases Current portion of finance leases and financing obligations 82 87 74 Noncurrent Operating leases Operating leases 2,474 2,479 2,620 Finance leases Finance leases and financing obligations 2,140 1,688 1,019 Total operating and finance leases $ 4,823 $ 4,399 $ 3,872 Consolidated Statement of Operations Quarter Ended (Dollars in Millions) Classification April 30, 2022 May 1, 2021 Operating leases Selling, general, and administrative $ 69 $ 77 Finance leases Amortization of leased assets Depreciation and amortization 29 20 Interest on leased assets Interest expense, net 32 25 Total operating and finance leases $ 130 $ 122 Consolidated Statement of Cash Flows Quarter Ended (Dollars in Millions) April 30, 2022 May 1, 2021 Cash paid for amounts included in the measurement of leased liabilities Operating cash flows from operating leases $ 70 $ 84 Operating cash flows from finance leases 30 25 Financing cash flows from finance leases 22 24 |
Summary of Future Lease Payments | The following table summarizes future lease payments by fiscal year: April 30, 2022 (Dollars in millions) Operating Leases Finance Leases Total 2022 $ 195 $ 146 $ 341 2023 260 204 464 2024 235 195 430 2025 226 189 415 2026 219 188 407 After 2026 3,384 3,309 6,693 Total lease payments $ 4,519 $ 4,231 $ 8,750 Amount representing interest ( 1,918 ) ( 2,009 ) ( 3,927 ) Lease liabilities $ 2,601 $ 2,222 $ 4,823 |
Summary of Weighted-Average Remaining Lease Term and Discount Rates | The following table summarizes weighted-average remaining lease term and discount rate: April 30, 2022 January 29, 2022 Weighted-average remaining term (years) Operating leases 20 20 Finance leases 20 20 Weighted-average discount rate Operating leases 6 % 6 % Finance leases 6 % 7 % |
Summary of Other Lease Information | Other lease information is as follows: Quarter Ended (Dollars in Millions) April 30, 2022 May 1, 2021 Property and equipment acquired through exchange of: Finance lease liabilities $ 472 $ 106 Operating lease liabilities 11 30 |
Summary of Financing Obligations | The following tables summarize our financing obligations and where they are presented in our Consolidated Financial Statements: Consolidated Balance Sheets (Dollars in millions) Classification April 30, January 29, May 1, Assets Financing obligations Property and equipment, net $ 53 $ 55 $ 62 Liabilities Current Current portion of finance leases and financing obligations 26 31 38 Noncurrent Finance leases and financing obligations 444 445 454 Total financing obligations $ 470 $ 476 $ 492 Consolidated Statement of Operations Quarter Ended (Dollars in Millions) Classification April 30, 2022 May 1, 2021 Amortization of financing obligation assets Depreciation and amortization 2 2 Interest on financing obligations Interest expense, net 12 9 Total financing obligations $ 14 $ 11 Consolidated Statement of Cash Flows Quarter Ended (Dollars in Millions) April 30, 2022 May 1, 2021 Cash paid for amounts included in the measurement of financing obligations Operating cash flows from financing obligations $ 12 $ 9 Financing cash flows from financing obligations 7 9 Proceeds from financing obligations 4 — |
Summary of Future Financing Obligation Payments | The following table summarizes future financing obligation payments by fiscal year: April 30, 2022 (Dollars in millions) Financing Obligations 2022 $ 55 2023 73 2024 69 2025 64 2026 60 After 2026 648 Total lease payments $ 969 Non-cash gain on future sale of property 185 Amount representing interest ( 684 ) Financing obligation liability $ 470 |
Summary of Weighted-Average Remaining Term and Discount Rate for Financing Obligations | The following table summarizes the weighted-average remaining term and discount rate for financing obligations: April 30, 2022 January 29, 2022 Weighted-average remaining term (years) 12 10 Weighted-average discount rate 11 % 9 % |
Stock-Based Awards (Tables)
Stock-Based Awards (Tables) | 3 Months Ended |
Apr. 30, 2022 | |
Share-based Payment Arrangement [Abstract] | |
Summary of Stock-Based Awards Activity | The following table summarizes our stock-based awards activity for the quarter ended April 30, 2022: Stock Options Nonvested Stock Awards Performance Share Units (Shares and Units in Thousands) Shares Weighted Shares Weighted Units Weighted Balance - January 29, 2022 12 $ 48.66 2,769 $ 36.17 856 $ 42.74 Granted — — 573 60.00 215 69.58 Exercised/vested — — ( 790 ) 37.50 — — Forfeited/expired — — ( 32 ) 41.20 — — Balance - April 30, 2022 12 $ 48.66 2,520 $ 41.11 1,071 $ 48.12 |
Net Income Per Share (Tables)
Net Income Per Share (Tables) | 3 Months Ended |
Apr. 30, 2022 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted Net Income Per Share | The information required to compute basic and diluted Net income per share is as follows: Quarter Ended (Dollar and Shares in Millions, Except per Share Data) April 30, 2022 May 1, 2021 Numerator—Net income $ 14 $ 14 Denominator—Weighted-average shares: Basic 127 154 Dilutive impact 2 2 Diluted 129 156 Net income per share: Basic $ 0.11 $ 0.09 Diluted $ 0.11 $ 0.09 |
Schedule of Potential Shares of Common Stock Excluded From the Diluted Net Income Per Share | The following potential shares of common stock were excluded from the diluted Net income per share calculation because their effect would have been anti-dilutive: Quarter Ended (Shares in Millions) April 30, 2022 May 1, 2021 Anti-dilutive shares 3 3 |
Revenue Recognition - Schedule
Revenue Recognition - Schedule of Net Sales by Line of Business (Details) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 30, 2022 | May 01, 2021 | |
Disaggregation Of Revenue [Line Items] | ||
Total revenue | $ 3,715 | $ 3,887 |
Net Sales [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Total revenue | 3,471 | 3,662 |
Net Sales [Member] | Women's [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Total revenue | 1,077 | 1,117 |
Net Sales [Member] | Men's [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Total revenue | 710 | 687 |
Net Sales [Member] | Home [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Total revenue | 525 | 634 |
Net Sales [Member] | Children's [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Total revenue | 411 | 468 |
Net Sales [Member] | Footwear [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Total revenue | 358 | 388 |
Net Sales [Member] | Accessories [Member] | ||
Disaggregation Of Revenue [Line Items] | ||
Total revenue | $ 390 | $ 368 |
Revenue Recognition - Additiona
Revenue Recognition - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Apr. 30, 2022 | Jan. 29, 2022 | May 01, 2021 | |
Disaggregation Of Revenue [Line Items] | |||
Rewards Program unredeemed gift cards and merchandise return cards liabilities | $ 312 | $ 353 | $ 298 |
Net Sales [Member] | |||
Disaggregation Of Revenue [Line Items] | |||
Revenue recognized | $ 74 |
Debt - Components of Long-term
Debt - Components of Long-term Debt (Details) - USD ($) $ in Millions | Apr. 30, 2022 | Jan. 29, 2022 | May 01, 2021 |
Debt Instrument [Line Items] | |||
Effective interest rate | 4.89% | 4.89% | 4.89% |
Outstanding | $ 1,923 | $ 1,923 | $ 1,923 |
Unamortized debt discounts and deferred financing costs | (13) | (13) | (14) |
Current portion of unsecured senior debt | (164) | ||
Long-term unsecured senior debt | $ 1,746 | 1,910 | 1,909 |
Senior Notes [Member] | Senior Notes Due 2023 [Member] | |||
Debt Instrument [Line Items] | |||
Effective interest rate | 3.25% | ||
Debt Instrument, Interest Rate, Stated Percentage | 3.25% | ||
Outstanding | $ 164 | 164 | 164 |
Senior Notes [Member] | Senior Notes 4.78% Due 2023 [Member] | |||
Debt Instrument [Line Items] | |||
Effective interest rate | 4.78% | ||
Debt Instrument, Interest Rate, Stated Percentage | 4.75% | ||
Outstanding | $ 111 | 111 | 111 |
Senior Notes [Member] | Senior Notes Due 2025 [Member] | |||
Debt Instrument [Line Items] | |||
Effective interest rate | 9.50% | ||
Debt Instrument, Interest Rate, Stated Percentage | 9.50% | ||
Outstanding | $ 113 | 113 | 113 |
Senior Notes [Member] | Senior Notes 4.25% Due 2025 [Member] | |||
Debt Instrument [Line Items] | |||
Effective interest rate | 4.25% | ||
Debt Instrument, Interest Rate, Stated Percentage | 4.25% | ||
Outstanding | $ 353 | 353 | 353 |
Senior Notes [Member] | Senior Notes Due 2029 [Member] | |||
Debt Instrument [Line Items] | |||
Effective interest rate | 7.36% | ||
Debt Instrument, Interest Rate, Stated Percentage | 7.25% | ||
Outstanding | $ 42 | 42 | 42 |
Senior Notes [Member] | Senior Notes Due 2031 [Member] | |||
Debt Instrument [Line Items] | |||
Effective interest rate | 3.40% | ||
Debt Instrument, Interest Rate, Stated Percentage | 3.38% | ||
Outstanding | $ 500 | 500 | 500 |
Senior Notes [Member] | Senior Notes Due 2033 [Member] | |||
Debt Instrument [Line Items] | |||
Effective interest rate | 6.05% | ||
Debt Instrument, Interest Rate, Stated Percentage | 6.00% | ||
Outstanding | $ 112 | 112 | 112 |
Senior Notes [Member] | Senior Notes Due 2037 [Member] | |||
Debt Instrument [Line Items] | |||
Effective interest rate | 6.89% | ||
Debt Instrument, Interest Rate, Stated Percentage | 6.88% | ||
Outstanding | $ 101 | 101 | 101 |
Senior Notes [Member] | Senior Notes Due 2045 [Member] | |||
Debt Instrument [Line Items] | |||
Effective interest rate | 5.57% | ||
Debt Instrument, Interest Rate, Stated Percentage | 5.55% | ||
Outstanding | $ 427 | $ 427 | $ 427 |
Debt - Additional Information (
Debt - Additional Information (Details) - USD ($) $ in Billions | Apr. 30, 2022 | Jan. 29, 2022 | May 01, 2021 |
Unsecured Senior Debt [Member] | |||
Debt Instrument [Line Items] | |||
Unsecured senior debt | $ 1.9 | $ 2 | $ 2.1 |
Leases - Additional Information
Leases - Additional Information (Details) | 3 Months Ended |
Apr. 30, 2022Shop | |
Lessee, Lease, Description [Line Items] | |
Number of Sephora shops opened | 248 |
Number of Sephora shops opened during the period | 48 |
Number of Sephora shops to be opened remainder of of 2022 | 352 |
Number Of Sephora shops to be opened in 2023 | 250 |
Store [Member] | |
Lessee, Lease, Description [Line Items] | |
Lease extension term | 5 years |
Minimum [Member] | Store [Member] | |
Lessee, Lease, Description [Line Items] | |
Lease initial term | 20 years |
Lease renewal term | 4 years |
Maximum [Member] | Store [Member] | |
Lessee, Lease, Description [Line Items] | |
Lease initial term | 25 years |
Lease renewal term | 8 years |
Leases - Summary of Operating a
Leases - Summary of Operating and Finance Leases (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Apr. 30, 2022 | May 01, 2021 | Jan. 29, 2022 | |
Assets | |||
Operating leases | $ 2,224 | $ 2,392 | $ 2,248 |
Finance leases | $ 1,883 | $ 792 | $ 1,442 |
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Property and equipment, net | Property and equipment, net | Property and equipment, net |
Total operating and finance leases | $ 4,107 | $ 3,184 | $ 3,690 |
Current liabilities: | |||
Operating leases | 127 | 159 | 145 |
Finance leases | $ 82 | $ 74 | $ 87 |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Finance Lease Liability And Financing Obligation Current | Finance Lease Liability And Financing Obligation Current | Finance Lease Liability And Financing Obligation Current |
Noncurrent | |||
Operating leases | $ 2,474 | $ 2,620 | $ 2,479 |
Finance leases | $ 2,140 | $ 1,019 | $ 1,688 |
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Finance Lease Liability And Financing Obligation Noncurrent | Finance Lease Liability And Financing Obligation Noncurrent | Finance Lease Liability And Financing Obligation Noncurrent |
Total operating and finance leases | $ 4,823 | $ 3,872 | $ 4,399 |
Income Statement | |||
Operating leases | 69 | 77 | |
Finance leases | |||
Amortization of leased assets | 29 | 20 | |
Interest on leased assets | 32 | 25 | |
Total operating and finance leases | 130 | 122 | |
Cash paid for amounts included in the measurement of leased liabilities | |||
Operating cash flows from operating leases | 70 | 84 | |
Operating cash flows from finance leases | 30 | 25 | |
Financing cash flows from finance leases | $ 22 | $ 24 |
Leases - Summary of Future Leas
Leases - Summary of Future Lease Payments (Details) - USD ($) $ in Millions | Apr. 30, 2022 | Jan. 29, 2022 | May 01, 2021 |
Operating Leases | |||
Operating Leases, 2022 | $ 195 | ||
Operating Leases, 2023 | 260 | ||
Operating Leases, 2024 | 235 | ||
Operating Leases, 2025 | 226 | ||
Operating Leases, 2026 | 219 | ||
Operating Leases, After 2026 | 3,384 | ||
Total lease payments, Operating Leases | 4,519 | ||
Amount representing interest, Operating Leases | (1,918) | ||
Lease liabilities, Operating Leases | 2,601 | ||
Finance Leases | |||
Finance Leases, 2021 | 146 | ||
Finance Leases, 2022 | 204 | ||
Finance Leases, 2023 | 195 | ||
Finance Leases, 2024 | 189 | ||
Finance Leases, 2025 | 188 | ||
Finance Leases, After 2025 | 3,309 | ||
Total lease payments, Finance Leases | 4,231 | ||
Amount representing interest, Finance Leases | (2,009) | ||
Lease liabilities, Finance Leases | 2,222 | ||
Total | |||
2021 | 341 | ||
2022 | 464 | ||
2023 | 430 | ||
2024 | 415 | ||
2025 | 407 | ||
After 2025 | 6,693 | ||
Total lease payments | 8,750 | ||
Amount representing interest | (3,927) | ||
Lease liabilities | $ 4,823 | $ 4,399 | $ 3,872 |
Leases - Summary of Weighted-Av
Leases - Summary of Weighted-Average Remaining Lease Term and Discount Rates (Details) | Apr. 30, 2022 | Jan. 29, 2022 |
Leases [Abstract] | ||
Operating leases, Weighted-average remaining term (years) | 20 years | 20 years |
Finance leases, Weighted-average remaining term (years) | 20 years | 20 years |
Operating leases, Weighted-average discount rate | 6.00% | 6.00% |
Finance leases, Weighted-average discount rate | 6.00% | 7.00% |
Leases - Summary of Other Lease
Leases - Summary of Other Lease Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 30, 2022 | May 01, 2021 | |
Property and equipment acquired through exchange of: | ||
Finance lease liabilities | $ 472 | $ 106 |
Operating lease liabilities | $ 11 | $ 30 |
Leases - Summary of Financing O
Leases - Summary of Financing Obligations (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Apr. 30, 2022 | May 01, 2021 | Jan. 29, 2022 | |
Assets | |||
Financing obligations | $ 53 | $ 62 | $ 55 |
Liabilities | |||
Current | 26 | 38 | 31 |
Noncurrent | 444 | 454 | 445 |
Total financing obligations | 470 | 492 | $ 476 |
Income Statement | |||
Amortization of financing obligation assets | 2 | 2 | |
Interest on financing obligations | 12 | 9 | |
Total financing obligations | 14 | 11 | |
Cash paid for amounts included in the measurement of financing obligations | |||
Operating cash flows from financing obligations | 12 | 9 | |
Financing cash flows from financing obligations | 7 | $ 9 | |
Proceeds from financing obligations | $ 4 |
Leases - Summary of Future Fina
Leases - Summary of Future Financing Obligation Payments (Details) - USD ($) $ in Millions | Apr. 30, 2022 | Jan. 29, 2022 | May 01, 2021 |
Leases [Abstract] | |||
2022 | $ 55 | ||
2023 | 73 | ||
2024 | 69 | ||
2025 | 64 | ||
2026 | 60 | ||
After 2026 | 648 | ||
Total lease payments | 969 | ||
Non-cash gain on future sale of property | 185 | ||
Amount representing interest | (684) | ||
Total financing obligations | $ 470 | $ 476 | $ 492 |
Leases - Summary of Weighted-_2
Leases - Summary of Weighted-Average Remaining Term and Discount Rate for Financing Obligations (Details) | 3 Months Ended | 12 Months Ended |
Apr. 30, 2022 | Jan. 29, 2022 | |
Leases [Abstract] | ||
Weighted-average remaining term (years) | 12 years | 10 years |
Weighted-average discount rate | 11.00% | 9.00% |
Stock-Based Awards - Summary of
Stock-Based Awards - Summary of Stock-Based Awards Activity (Details) shares in Thousands | 3 Months Ended |
Apr. 30, 2022$ / sharesshares | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Stock Options, Beginning Balance | shares | 12 |
Stock Options, Ending Balance | shares | 12 |
Stock Options, Weighted Average Exercise Price, Beginning Balance | $ / shares | $ 48.66 |
Stock Options, Weighted Average Exercise Price, Ending Balance | $ / shares | $ 48.66 |
Nonvested Stock Awards [Member] | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Stock Awards/ Share Units, Beginning Balance | shares | 2,769 |
Stock Awards/ Share Units, Granted | shares | 573 |
Stock Awards/ Share Units, Exercised/vested | shares | (790) |
Stock Awards/ Share Units, Forfeited/expired | shares | (32) |
Stock Awards/ Share Units, Ending Balance | shares | 2,520 |
Stock Awards/ Share Units, Weighted Average Grant Date Fair Value, Beginning Balance | $ / shares | $ 36.17 |
Stock Awards/ Share Units, Awards/Units, Weighted Average Grant Date Fair Value, Granted | $ / shares | 60 |
Stock Awards/ Share Units, Weighted Average Grant Date Fair Value, Exercised/vested | $ / shares | 37.50 |
Stock Awards/ Share Units, Weighted Average Grant Date Fair Value, Forfeited/expired | $ / shares | 41.20 |
Stock Awards/ Share Units, Weighted Average Grant Date Fair Value, Ending Balance | $ / shares | $ 41.11 |
Performance Share Units [Member] | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Stock Awards/ Share Units, Beginning Balance | shares | 856 |
Stock Awards/ Share Units, Granted | shares | 215 |
Stock Awards/ Share Units, Ending Balance | shares | 1,071 |
Stock Awards/ Share Units, Weighted Average Grant Date Fair Value, Beginning Balance | $ / shares | $ 42.74 |
Stock Awards/ Share Units, Awards/Units, Weighted Average Grant Date Fair Value, Granted | $ / shares | 69.58 |
Stock Awards/ Share Units, Weighted Average Grant Date Fair Value, Ending Balance | $ / shares | $ 48.12 |
Stock-Based Awards - Additional
Stock-Based Awards - Additional Information (Details) - shares | 3 Months Ended | |
Apr. 30, 2022 | Feb. 01, 2020 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Stock warrants, issued | 1,747,441 | |
Warrant [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Vested warrants | 1,048,465 | |
Unvested warrants | 698,976 |
Net Income Per Share - Computat
Net Income Per Share - Computation of Basic and Diluted Net Income Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | |
Apr. 30, 2022 | May 01, 2021 | |
Earnings Per Share [Abstract] | ||
Numerator---Net income | $ 14 | $ 14 |
Denominator—Weighted-average shares: Basic | 127 | 154 |
Dilutive impact | 2 | 2 |
Weighted average shares, Diluted | 129 | 156 |
Basic | $ 0.11 | $ 0.09 |
Diluted | $ 0.11 | $ 0.09 |
Net Income Per Share - Schedule
Net Income Per Share - Schedule of Potential Shares of Common Stock Excluded From the Diluted Net Income Per Share (Details) - shares shares in Millions | 3 Months Ended | |
Apr. 30, 2022 | May 01, 2021 | |
Earnings Per Share [Abstract] | ||
Anti-dilutive shares | 3 | 3 |