Exhibit 99.1
Kohl's Corporation Reports Financial Results
| • | Shifted comparable sales* increase 3.1%; fiscal comparable sales increase 4.3% |
| • | Gross margin increases 42 bps |
| • | Raises earnings per share guidance |
MENOMONEE FALLS, Wis.--(BUSINESS WIRE)—August 21, 2018-- Kohl’s Corporation (NYSE:KSS) today reported results for the three and six month periods ended August 4, 2018.
| Three Months | Six Months |
($ in millions, except per share data) | 2018 | 2017 | Change | 2018 | 2017 | Change |
Total revenue | $ | 4,570 | | $ | 4,395 | | | 4.0 | % | $ | 8,778 | | $ | 8,460 | | | 3.8 | % |
Comparable sales* | | 3.1 | % | | (0.4) | % | | | | | 1.8 | % | | (1.5) | % | | | |
Gross margin | | 39.5 | % | | 39.1 | % | 42 bps | | 38.3 | % | | 37.8 | % | 46 bps |
Selling, general, and administrative expenses | $ | 1,272 | | $ | 1,220 | | | 4.3 | % | $ | 2,532 | | $ | 2,434 | | | 4.0 | % |
Reported | | | | | | | | | | | | | | | | | | |
Net income | $ | 292 | | $ | 208 | | | 40 | % | $ | 368 | | $ | 274 | | | 34 | % |
Diluted earnings per share | $ | 1.76 | | $ | 1.24 | | | 42 | % | $ | 2.21 | | $ | 1.62 | | | 36 | % |
Excluding loss on extinguishment of debt: | | | | | | | | | | | | | | | | | | |
Net income | $ | 292 | | $ | 208 | | | 40 | % | $ | 399 | | $ | 274 | | | 46 | % |
Diluted earnings per share | $ | 1.76 | | $ | 1.24 | | | 42 | % | $ | 2.40 | | $ | 1.62 | | | 48 | % |
*Comparable sales for the 13 weeks ended August 4, 2018 and August 5, 2017
Michelle Gass, Kohl's chief executive officer, said, “We are pleased to report that our sales momentum continued in the second quarter, resulting in a comparable sales increase of 3.1%, our fourth consecutive quarter of positive comparable sales. We saw strength across the business -- both our store and digital channels, all regions of the country, and our proprietary and national brands. Our Men's and Women's apparel businesses led the company, followed closely by Footwear. We also reported higher gross margin as a result of our ongoing focus on inventory management. I would like to thank our team for their outstanding efforts in delivering strong and sustainable performance, which are reflected in our results.”
Dividend
On August 14, 2018, Kohl's Board of Directors declared a quarterly cash dividend on the Company's common stock of $0.61 per share. The dividend is payable September 26, 2018 to shareholders of record at the close of business on September 12, 2018.
Guidance Update
The Company now expects its fiscal 2018 diluted earnings per share to be $4.96 to $5.36, compared to its prior guidance of $4.86 to $5.31. Excluding the loss on extinguishment of debt, fiscal 2018 diluted earnings per share is expected to be $5.15 to $5.55, compared to prior guidance of $5.05 to $5.50.
Second Quarter 2018 Earnings Conference Call
Kohl's will host its quarterly earnings conference call at 9:00 am ET on August 21, 2018. The phone number for the conference call is (800) 230-1085. Replays of the call will be available for 30 days by dialing (800) 475-6701. The conference ID is 433485. The conference call and replays are also accessible via the Company's website at http://corporate.kohls.com/investors/events-and-presentations.
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 2018 earnings guidance. 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 in Item 1A in 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.
About Kohl's
Kohl’s (NYSE: KSS) is a leading omnichannel retailer with more than 1,100 stores in 49 states. With a commitment to inspiring and empowering families to lead fulfilled lives, Kohl’s offers amazing national and exclusive brands, incredible savings and an easy shopping experience in our stores, online at Kohls.com and on Kohl's mobile app. Throughout its history, Kohl's has given nearly $650 million to support
communities nationwide. For a list of store locations or to shop online, visit Kohls.com. For more information about Kohl’s impact in the community or how to join our winning team, visit Corporate.Kohls.com or follow @KohlsNews on Twitter.
Contacts
Investor Relations:
Jill Timm, (262) 703-2203, jill.timm@kohls.com
Media:
Jen Johnson, (262) 703-5241, jen.johnson@kohls.com
KOHL’S CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
| Three Months Ended | Six Months Ended |
(Dollars in Millions, Except per Share Data) | August 4, 2018 | July 29, 2017 | August 4, 2018 | July 29, 2017 |
Net sales | $ | 4,310 | | $ | 4,147 | | $ | 8,263 | | $ | 7,962 | |
Other revenue | | 260 | | | 248 | | | 515 | | | 498 | |
Total revenue | | 4,570 | | | 4,395 | | | 8,778 | | | 8,460 | |
Cost of merchandise sold | | 2,605 | | | 2,525 | | | 5,101 | | | 4,953 | |
Gross margin rate | | 39.5 | % | | 39.1 | % | | 38.3 | % | | 37.8 | % |
Operating expenses: | | | | | | | | | | | | |
Selling, general, and administrative | | 1,272 | | | 1,220 | | | 2,532 | | | 2,434 | |
As a percent of total revenue | | 27.8 | % | | 27.8 | % | | 28.8 | % | | 28.8 | % |
Depreciation and amortization | | 241 | | | 243 | | | 483 | | | 482 | |
Operating income | | 452 | | | 407 | | | 662 | | | 591 | |
Interest expense, net | | 65 | | | 75 | | | 135 | | | 150 | |
Loss on extinguishment of debt | | — | | | — | | | 42 | | | — | |
Income before income taxes | | 387 | | | 332 | | | 485 | | | 441 | |
Provision for income taxes | | 95 | | | 124 | | | 117 | | | 167 | |
Net income | $ | 292 | | $ | 208 | | $ | 368 | | $ | 274 | |
| | | | | | | | | | | | |
Average number of shares: | | | | | | | | | | | | |
Basic | | 165 | | | 168 | | | 165 | | | 169 | |
Diluted | | 166 | | | 168 | | | 166 | | | 169 | |
Earnings per share: | | | | | | | | | | | | |
Basic | $ | 1.77 | | $ | 1.24 | | $ | 2.23 | | $ | 1.62 | |
Diluted | $ | 1.76 | | $ | 1.24 | | $ | 2.21 | | $ | 1.62 | |
Excluding loss on extinguishment of debt: | | | | | | | | | | | | |
Net income | $ | 292 | | $ | 208 | | $ | 399 | | $ | 274 | |
Diluted earnings per share | $ | 1.76 | | $ | 1.24 | | $ | 2.40 | | $ | 1.62 | |
KOHL’S CORPORATION
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Dollars in Millions) | August 4, 2018 | July 29, 2017 |
Assets | | | | | | |
Current assets: | | | | | | |
Cash and cash equivalents | $ | 1,066 | | $ | 552 | |
Merchandise inventories | | 3,572 | | | 3,853 | |
Other | | 404 | | | 381 | |
Total current assets | | 5,042 | | | 4,786 | |
Property and equipment, net | | 7,635 | | | 8,068 | |
Other assets | | 238 | | | 230 | |
Total assets | $ | 12,915 | | $ | 13,084 | |
| | | | | | |
Liabilities and Shareholders' Equity | | | | | | |
Current liabilities: | | | | | | |
Accounts payable | $ | 1,404 | | $ | 1,370 | |
Accrued liabilities | | 1,174 | | | 1,125 | |
Income taxes payable | | 70 | | | 43 | |
Current portion of capital lease and financing obligations | | 122 | | | 133 | |
Total current liabilities | | 2,770 | | | 2,671 | |
Long-term debt | | 2,273 | | | 2,796 | |
Capital lease and financing obligations | | 1,537 | | | 1,637 | |
Deferred income taxes | | 188 | | | 268 | |
Other long-term liabilities | | 660 | | | 691 | |
Shareholders' equity | | 5,487 | | | 5,021 | |
Total liabilities and shareholders' equity | $ | 12,915 | | $ | 13,084 | |
KOHL’S CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| Six Months Ended | |
(Dollars in Millions) | August 4, 2018 | July 29, 2017 |
Operating activities | | | | | | |
Net income | $ | 368 | | $ | 274 | |
Adjustments to reconcile net income to net cash provided by operating activities: | | | | | | |
Depreciation and amortization | | 483 | | | 482 | |
Share-based compensation | | 50 | | | 21 | |
Deferred income taxes | | (25 | ) | | (2 | ) |
Loss on extinguishment of debt | | 42 | | | — | |
Other non-cash revenues and expenses | | 13 | | | (5 | ) |
Changes in operating assets and liabilities: | | | | | | |
Merchandise inventories | | (24 | ) | | (53 | ) |
Accrued and other long-term liabilities | | (88 | ) | | (176 | ) |
Accounts payable | | 133 | | | (137 | ) |
Other current and long-term assets | | 89 | | | 36 | |
Income taxes | | 6 | | | (64 | ) |
Net cash provided by operating activities | | 1,047 | | | 376 | |
| | | | | | |
Investing activities | | | | | | |
Acquisition of property and equipment | | (312 | ) | | (399 | ) |
Other | | 6 | | | 16 | |
Net cash used in investing activities | | (306 | ) | | (383 | ) |
| | | | | | |
Financing activities | | | | | | |
Treasury stock purchases | | (165 | ) | | (250 | ) |
Shares withheld for taxes on vested restricted shares | | (21 | ) | | (12 | ) |
Dividends paid | | (202 | ) | | (186 | ) |
Reduction of long-term borrowings | | (528 | ) | | — | |
Premium paid on redemption of debt | | (35 | ) | | — | |
Capital lease and financing obligation activity | | (64 | ) | | (67 | ) |
Proceeds from stock option exercises | | 32 | | | — | |
Net cash used in financing activities | | (983 | ) | | (515 | ) |
Net decrease in cash and cash equivalents | | (242 | ) | | (522 | ) |
Cash at beginning of period | | 1,308 | | | 1,074 | |
Cash at end of period | $ | 1,066 | | $ | 552 | |
