EX-99.1 2 q32013earningsrelease.htm PRESS RELEASE DATED NOVEMBER 14, 2013 Q3 2013 Earnings Release


Kohl's Corporation Reports Third Quarter Financial Results

MENOMONEE FALLS, Wis.--(BUSINESS WIRE)--November 14, 2013-- Kohl’s Corporation (NYSE:KSS). Kohl’s Corporation today reported results for the quarter and year-to-date period ended November 2, 2013.
 
Quarter
 
Year to Date
($ in millions)
2013
 
2012
 
Change
 
2013
 
2012
 
Change
Sales
$
4,444

 
$
4,490

 
(1.0)%
 
$
12,932

 
$
12,937

 
—%
Comparable store sales
(1.6
)%
 
1.1
%
 
-
 
(0.9
)%
 
(0.5
)%
 
-
Net income
$
177

 
$
215

 
(18)%
 
$
555

 
$
609

 
(9)%
Diluted earnings per share
$
0.81

 
$
0.91

 
(11)%
 
$
2.51

 
$
2.54

 
(1)%

Kevin Mansell, Kohl's chairman, president and chief executive officer, said, “As we enter the Holiday season, we believe we are well-positioned from a merchandise content and inventory perspective to gain market share.  We have increased our marketing spending and improved its impact and reach in order to drive higher traffic to our stores and on-line.  Our customer will find the perfect gift for everyone on her shopping list at Kohl's and will be excited by the value she receives in both our only-at-Kohl's and national brands."  

Dividend
On November 13, 2013, Kohl's Board of Directors declared a quarterly cash dividend on the Company's common stock of $0.35 per share. The dividend is payable December 24, 2013 to shareholders of record at the close of business on December 11, 2013.

Store Update
Kohl’s ended the quarter with 1,158 stores in 49 states, compared with 1,146 stores at the same time last year. The Company opened three new stores during the third quarter and nine new stores during the first quarter of 2013. Additionally, the Company remodeled 30 stores in 2013.

Earnings Guidance
The Company provided initial guidance for the fiscal quarter ending February 1, 2014 of $1.59 to $1.74 per diluted share. The guidance is based on total sales declines of 2 to 4 percent and comparable store sales declines of 0 to 2 percent. The Company also updated its annual earnings per share guidance from $4.15 - $4.35 to $4.08 to $4.23. The Company also announced that it will provide only annual guidance beginning in Fiscal 2014.

Third Quarter 2013 Earnings Conference Call
Kohl's will host its quarterly earnings conference call at 8:30 am ET on November 14, 2013. The phone number for the conference call is (706) 902-0486. Replays of the call will be available for 30 days by dialing (855) 859-2056 or (404) 537-3406.  The conference ID for both the live call and the replay is 24984194. The conference call and replays are also accessible via the Company's web site at http://www.kohlscorporation.com/InvestorRelations/event-calendar.htm.

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 sales and earnings. 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
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. With a commitment to environmental leadership, Kohl’s operates 1,158 stores in 49 states. In support of the communities it serves, Kohl’s has raised more than $231 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, visit www.Kohls.com, join the discussion on Facebook (http://www.facebook.com/kohls) or Twitter (http://twitter.com/Kohls) or get inspired on Pinterest (http://pinterest.com/kohls/) and Instagram (http://instagram.com/kohls).

Contacts
Investor Relations:
Wes McDonald, Senior Executive Vice President and Chief Financial Officer, (262) 703-1893
Joanne Crevoiserat, Executive Vice President - Finance, (262) 703-2945

Media:
Kristen Cunningham, Manager - Public Relations, (262) 703-7863





KOHL'S CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(In Millions, except per share data)
(Unaudited)
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Nine Months Ended
 
November 2,
2013
 
October 27,
2012
 
November 2,
2013
 
October 27, 2012
Net sales
$
4,444

 
$
4,490

 
$
12,932

 
$
12,937

Cost of merchandise sold
2,778

 
2,778

 
8,063

 
8,059

 
 
 
 
 
 
 
 
Gross margin
1,666

 
1,712

 
4,869

 
4,878

 
 
 
 
 
 
 
 
Operating expenses:
 
 
 
 
 
 
 
Selling, general, and administrative
1,073

 
1,077

 
3,071

 
3,055

Depreciation and amortization
228

 
210

 
665

 
620

 
 
 
 
 
 
 
 
Operating income
365

 
425

 
1,133

 
1,203

 
 
 
 
 
 
 
 
Interest expense, net
84

 
80

 
251

 
243

 
 
 
 
 
 
 
 
Income before income taxes
281

 
345

 
882

 
960

Provision for income taxes
104

 
130

 
327

 
351

 
 
 
 
 
 
 
 
Net income
$
177

 
$
215

 
$
555

 
$
609

 
 
 
 
 
 
 
 
Basic net income per share
$
0.82

 
$
0.92

 
$
2.53

 
$
2.56

Average number of shares
216

 
233

 
219

 
238

 
 
 
 
 
 
 
 
Diluted net income per share
$
0.81

 
$
0.91

 
$
2.51

 
$
2.54

Average number of shares
218

 
235

 
221

 
240

 
 
 
 
 
 
 
 
As a percent of net sales:
 
 
 
 
 
 
 
Gross margin
37.5
%
 
38.1
%
 
37.7
%
 
37.7
%
Selling, general and
 
 
 
 
 
 
 
administrative expenses
24.1
%
 
24.0
%
 
23.7
%
 
23.6
%
Operating income
8.2
%
 
9.5
%
 
8.8
%
 
9.3
%
Net income
4.0
%
 
4.8
%
 
4.3
%
 
4.7
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 





KOHL'S CORPORATION
CONSOLIDATED BALANCE SHEETS
(In Millions)
(Unaudited)
 
 
 
 
 
 
 
November 2,
2013
 
October 27,
2012
Assets
 
 
 
 
Current assets:
 
 
 
 
  Cash and cash equivalents
 
$
598

 
$
550

  Merchandise inventories
 
4,959

 
4,851

  Deferred income taxes
 
147

 
124

  Other
 
283

 
281

 
 
 
 
 
  Total current assets
 
5,987

 
5,806

 
 
 
 
 
Property and equipment, net
 
8,925

 
9,009

Long-term investments
 
57

 
90

Other assets
 
276

 
256

 
 
 
 
 
  Total assets
 
$
15,245

 
$
15,161

 
 
 
 
 
Liabilities and Shareholders' Equity
 
 
 
 
Current liabilities:
 
 
 
 
Accounts payable
 
$
2,261

 
$
2,429

Accrued liabilities
 
1,198

 
1,127

Income taxes payable
 
41

 
48

Current portion of capital lease
 
 
 
 
  and financing obligations
 
141

 
100

 
 
 
 
 
  Total current liabilities
 
3,641

 
3,704

 
 
 
 
 
Long-term debt
 
2,792

 
2,492

Capital lease and financing obligations
 
1,950

 
1,986

Deferred income taxes
 
390

 
395

Other long-term liabilities
 
548

 
478

Shareholders' equity
 
5,924

 
6,106

 
 
 
 
 
  Total liabilities and shareholders' equity
 
$
15,245

 
$
15,161

 
 
 
 
 
 
 
 
 
 












KOHL'S CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Millions)
(Unaudited)
 
 
Nine Months Ended
 
November 2,
2013
 
October 27,
2012
Operating activities
 
 
 
Net income
$
555

 
$
609

Adjustments to reconcile net income to net cash
 
 
 
provided by operating activities:
 
 
 
Depreciation and amortization
665

 
620

Share-based compensation
41

 
37

Excess tax benefits from share-based compensation
(3
)
 
(3
)
Deferred income taxes
(1
)
 
(46
)
Other non-cash revenues and expenses
30

 
26

Changes in operating assets and liabilities:
 
 
 
Merchandise inventories
(1,204
)
 
(1,628
)
Other current and long-term assets
11

 
30

Accounts payable
954

 
1,196

Accrued and other long-term liabilities
79

 
(47
)
Income taxes
(113
)
 
(91
)
 
 
 
 
Net cash provided by operating activities
1,014

 
703

 
 
 
 
Investing activities
 
 
 
Acquisition of property and equipment
(465
)
 
(641
)
Sales of investments in auction rate securities
1

 
68

Other
13

 
5

 
 
 
 
Net cash used in investing activities
(451
)
 
(568
)
 
 
 
 
Financing activities
 
 
 
Treasury stock purchases
(562
)
 
(883
)
Dividends paid
(229
)
 
(227
)
Proceeds from issuance of debt
300

 
350

Proceeds from financing obligations
—

 
7

Capital lease and financing obligation payments
(87
)
 
(87
)
Proceeds from stock option exercises
77

 
50

Excess tax benefits from share-based compensation
3

 
3

Deferred financing costs
(4
)
 
(3
)
 
 
 
 
Net cash used in financing activities
(502
)
 
(790
)
 
 
 
 
Net increase (decrease) in cash and cash equivalents
61

 
(655
)
Cash and cash equivalents at beginning of period
537

 
1,205

 
 
 
 
Cash and cash equivalents at end of period
$
598

 
$
550