Exhibit 99.1
Kohl's Corporation Reports Financial Results
| • | Comparable sales increase 0.4% |
| • | Diluted earnings per share of $0.78 |
| • | Adjusted diluted earnings per share(1) of $0.74 |
| • | Updates adjusted annual diluted earnings per share(1) guidance to $4.75 to $4.95 |
MENOMONEE FALLS, Wis.--(BUSINESS WIRE)—November 19, 2019-- Kohl’s Corporation (NYSE:KSS) today reported results for the quarter ended November 2, 2019.
| Three Months | | Nine Months | |
($ in millions, except per share data) | | 2019 | | 2018 | | Change | | | 2019 | | 2018 | | Change | |
Total revenue | $ | 4,625 | | $ | 4,628 | | | (0.1 | )% | $ | 13,142 | | $ | 13,406 | | | (2.0 | )% |
Comparable sales | | 0.4 | % | | 2.5 | % | | | | | (1.9 | )% | | 2.1 | % | | | |
Gross margin | | 36.3 | % | | 37.0 | % | (67) bps | | | 37.3 | % | | 37.8 | % | (51) bps | |
Selling, general, and administrative expenses | $ | 1,419 | | $ | 1,375 | | | 3.2 | % | $ | 3,962 | | $ | 3,907 | | | 1.4 | % |
Reported | | | | | | | | | | | | | | | | | | |
Net income | $ | 123 | | $ | 161 | | | (24 | )% | $ | 426 | | $ | 529 | | | (19 | )% |
Diluted earnings per share | $ | 0.78 | | $ | 0.98 | | | (20 | )% | $ | 2.67 | | $ | 3.19 | | | (16 | )% |
Non-GAAP(1) | | | | | | | | | | | | | | | | | | |
Net income | $ | 116 | | $ | 161 | | | (28 | )% | $ | 460 | | $ | 561 | | | (18 | )% |
Diluted earnings per share | $ | 0.74 | | $ | 0.98 | | | (24 | )% | $ | 2.89 | | $ | 3.38 | | | (14 | )% |
(1) Excludes Impairments, store closing and other costs, and (Gain) loss on extinguishment of debt.
Michelle Gass, Kohl's chief executive officer, said, "We are pleased to report that our business returned to growth during the third quarter, with a comparable sales increase of 0.4%. The quarter started off positive in August with another successful back-to-school season and ended strong in October. We enter the holiday period with momentum and are strategically increasing our investments to take advantage of the unique opportunity to fuel growth and customer acquisition. We believe that investing in the short-term will support our strategies to drive profitable growth over the long-term.”
Dividend
On November 13, 2019, Kohl's Board of Directors declared a quarterly cash dividend on the Company's common stock of $0.67 per share. The dividend is payable December 24, 2019 to shareholders of record at the close of business on December 11, 2019.
Guidance
The Company now expects adjusted annual earnings per diluted share to be $4.75 to $4.95, which excludes $0.22 per diluted share related to the extinguishment of debt and impairments, store closing and other costs recognized in the first nine months of 2019, compared to its prior guidance of $5.15 to $5.45.
Third Quarter 2019 Earnings Conference Call
Kohl's will host its quarterly earnings conference call at 9:00 am ET on November 19, 2019. The phone number for the conference call is (800) 398-9397. Replays of the call will be available for 30 days by dialing (800) 475-6701. The conference ID is 468137. The conference call and replays are also accessible via the Company's web site 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 2019 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. Forward-looking statements relate to the date initially made, and Kohl’s undertakes no obligation to update them.
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. Since its founding, Kohl's has given more than $700 million to support communities nationwide, with a focus on family health and wellness. 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:
Mark Rupe, (262) 703-1266, mark.rupe@kohls.com
Media:
Jen Johnson, (262) 703-5241, jen.johnson@kohls.com
KOHL’S CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
| Three Months Ended | | Nine Months Ended | |
(Dollars in Millions, Except per Share Data) | November 2, 2019 | November 3, 2018 | November 2, 2019 | November 3, 2018 |
Net sales | $ | 4,358 | | $ | 4,369 | | $ | 12,348 | | $ | 12,632 | |
Other revenue | | 267 | | | 259 | | | 794 | | | 774 | |
Total revenue | | 4,625 | | | 4,628 | | | 13,142 | | | 13,406 | |
Cost of merchandise sold | | 2,775 | | | 2,752 | | | 7,740 | | | 7,854 | |
Gross margin rate | | 36.3 | % | | 37.0 | % | | 37.3 | % | | 37.8 | % |
Operating expenses: | | | | | | | | | | | | |
Selling, general, and administrative | | 1,419 | | | 1,375 | | | 3,962 | | | 3,907 | |
As a percent of total revenue | | 30.7 | % | | 29.7 | % | | 30.1 | % | | 29.1 | % |
Depreciation and amortization | | 227 | | | 243 | | | 687 | | | 725 | |
Impairments, store closing and other costs | | - | | | - | | | 55 | | | - | |
Operating income | | 204 | | | 258 | | | 698 | | | 920 | |
Interest expense, net | | 52 | | | 63 | | | 157 | | | 197 | |
(Gain) loss on extinguishment of debt | | (9 | ) | | - | | | (9 | ) | | 42 | |
Income before income taxes | | 161 | | | 195 | | | 550 | | | 681 | |
Provision for income taxes | | 38 | | | 34 | | | 124 | | | 152 | |
Net income | $ | 123 | | $ | 161 | | $ | 426 | | $ | 529 | |
Average number of shares: | | | | | | | | | | | | |
Basic | | 156 | | | 164 | | | 158 | | | 165 | |
Diluted | | 157 | | | 165 | | | 159 | | | 166 | |
Earnings per share: | | | | | | | | | | | | |
Basic | $ | 0.79 | | $ | 0.98 | | $ | 2.69 | | $ | 3.21 | |
Diluted | $ | 0.78 | | $ | 0.98 | | $ | 2.67 | | $ | 3.19 | |
ADJUSTED NET INCOME AND DILUTED EARNINGS PER SHARE, NON-GAAP FINANCIAL MEASURES
(Unaudited)
| Three Months Ended | | Nine Months Ended | |
(Dollars in Millions, Except per Share Data) | November 2, 2019 | November 3, 2018 | November 2, 2019 | November 3, 2018 |
Net income | | | | | | | | | | | | |
GAAP | $ | 123 | | $ | 161 | | $ | 426 | | $ | 529 | |
Impairments, store closing and other costs | | - | | | - | | | 41 | | | - | |
(Gain) loss on extinguishment of debt | | (7 | ) | | - | | | (7 | ) | | 32 | |
Adjusted (non-GAAP) | $ | 116 | | $ | 161 | | $ | 460 | | $ | 561 | |
| | | | | | | | | | | | |
Diluted earnings per share | | | | | | | | | | | | |
GAAP | $ | 0.78 | | $ | 0.98 | | $ | 2.67 | | $ | 3.19 | |
Impairments, store closing and other costs | | - | | | - | | | 0.26 | | | - | |
(Gain) loss on extinguishment of debt | | (0.04 | ) | | - | | | (0.04 | ) | | 0.19 | |
Adjusted (non-GAAP) | $ | 0.74 | | $ | 0.98 | | $ | 2.89 | | $ | 3.38 | |
KOHL’S CORPORATION
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Dollars in Millions) | November 2, 2019 | November 3, 2018 |
Assets | | | | | | |
Current assets: | | | | | | |
Cash and cash equivalents | $ | 490 | | $ | 1,047 | |
Merchandise inventories | | 4,887 | | | 4,844 | |
Other | | 404 | | | 446 | |
Total current assets | | 5,781 | | | 6,337 | |
Property and equipment, net | | 7,364 | | | 7,538 | |
Operating leases | | 2,427 | | | - | |
Other assets | | 167 | | | 243 | |
Total assets | $ | 15,739 | | $ | 14,118 | |
Liabilities and Shareholders' Equity | | | | | | |
Current liabilities: | | | | | | |
Accounts payable | $ | 2,454 | | $ | 2,583 | |
Accrued liabilities | | 1,347 | | | 1,289 | |
Income taxes payable | | 2 | | | 14 | |
Current portion of: | | | | | | |
Finance leases and financing obligations | | 110 | | | 121 | |
Operating leases | | 162 | | | - | |
Total current liabilities | | 4,075 | | | 4,007 | |
Long-term debt | | 1,856 | | | 2,272 | |
Finance leases and financing obligations | | 1,332 | | | 1,528 | |
Operating leases | | 2,643 | | | - | |
Deferred income taxes | | 258 | | | 201 | |
Other long-term liabilities | | 220 | | | 657 | |
Shareholders' equity | | 5,355 | | | 5,453 | |
Total liabilities and shareholders' equity | $ | 15,739 | | $ | 14,118 | |
KOHL’S CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| Nine Months Ended |
(Dollars in Millions) | November 2, 2019 | November 3, 2018 |
Operating activities | | | | | | |
Net income | $ | 426 | | $ | 529 | |
Adjustments to reconcile net income to net cash provided by operating activities: | | | | | | |
Depreciation and amortization | | 687 | | | 725 | |
Share-based compensation | | 47 | | | 71 | |
Deferred income taxes | | 45 | | | (13 | ) |
Impairments, store closing and other costs | | 45 | | | - | |
(Gain) loss on extinguishment of debt | | (9 | ) | | 42 | |
Non-cash lease expense | | 112 | | | - | |
Other non-cash (income) expenses | | (3 | ) | | 15 | |
Changes in operating assets and liabilities: | | | | | | |
Merchandise inventories | | (1,405 | ) | | (1,293 | ) |
Other current and long-term assets | | 34 | | | 70 | |
Accounts payable | | 1,266 | | | 1,312 | |
Accrued and other long-term liabilities | | (26 | ) | | 38 | |
Income taxes | | (49 | ) | | (73 | ) |
Operating lease liabilities | | (125 | ) | | - | |
Net cash provided by operating activities | | 1,045 | | | 1,423 | |
| | | | | | |
Investing activities | | | | | | |
Acquisition of property and equipment | | (678 | ) | | (458 | ) |
Other | | 8 | | | 6 | |
Net cash used in investing activities | | (670 | ) | | (452 | ) |
| | | | | | |
Financing activities | | | | | | |
Treasury stock purchases | | (387 | ) | | (275 | ) |
Shares withheld for taxes on vested restricted shares | | (32 | ) | | (29 | ) |
Dividends paid | | (319 | ) | | (301 | ) |
Reduction of long-term borrowings | | (6 | ) | | (530 | ) |
Premium paid on redemption of debt | | - | | | (35 | ) |
Finance lease and financing obligation payments | | (88 | ) | | (95 | ) |
Proceeds from financing obligations | | 11 | | | - | |
Proceeds from stock option exercises | | 2 | | | 33 | |
Net cash used in financing activities | | (819 | ) | | (1,232 | ) |
Net decrease in cash and cash equivalents | | (444 | ) | | (261 | ) |
Cash at beginning of period | | 934 | | | 1,308 | |
Cash at end of period | $ | 490 | | $ | 1,047 | |
