EX-99.1 2 q42016earningsrelease.htm PRESS RELEASE DATED FEBRUARY 23, 2017 Exhibit


Kohl's Corporation Reports Financial Results

MENOMONEE FALLS, Wis.--(BUSINESS WIRE)--February 23, 2017-- Kohl’s Corporation (NYSE:KSS) today reported results for the quarter and year ended January 28, 2017.
 
Three Months
Twelve Months
($ in millions)
2016
2015
Change
2016
2015
Change
Total sales
$
6,205

$
6,387

(2.8)%
$
18,686

$
19,204

(2.7)%
Comparable store sales
 
 
(2.2)%
 
 
(2.4)%
Gross margin
33.4
%
33.1
%
33 bp
36.1
%
36.1
%
(6) bp
Selling, general, and administrative expenses
$
1,360

$
1,332

2%
$
4,435

$
4,452

—%
Reported
 
 
 
 
 
 
Net income
$
252

$
296

(15)%
$
556

$
673

(17)%
Diluted earnings per share
$
1.44

$
1.58

(9)%
$
3.11

$
3.46

(10)%
Excluding non-recurring items*
 
 
 
 
 
 
Net income
$
252

$
296

(15)%
$
673

$
781

(14)%
Diluted earnings per share
$
1.44

$
1.58

(9)%
$
3.76

$
4.01

(6)%
*Excludes Impairments, store closing and other costs in 2016 and Loss on extinguishment of debt in 2015.

Kevin Mansell, Kohl's chairman, chief executive officer and president, said, “Sales results were weak for the quarter in total, driven by declines in brick and mortar traffic, and offset somewhat by strength in online demand. We saw improvement in merchandise margin, and our team continued to manage inventory and expenses extremely well. In 2017, we will accelerate our focus on becoming the destination for active and wellness with the launch of Under Armour in early March. We will also extend our efforts on improving our speed to market across all of our proprietary brands into all apparel areas and home.”

Dividend
On February 22, 2017, Kohl's Board of Directors declared a quarterly cash dividend on the Company's common stock of $0.55 per share, a 10% increase over its prior dividend. The dividend is payable March 22, 2017 to shareholders of record at the close of business on March 8, 2017.

Store Update
Kohl's ended the fiscal year with 1,154 Kohl's stores in 49 states. During 2016, the Company:
•
Opened 9 small format Kohl's stores
•
Closed 19 Kohl's stores
•
Opened two Off/Aisle locations
•
Opened 12 FILA outlets

Initial 2017 Earnings Guidance
The Company expects earnings per diluted share of $3.50 to $3.80 for fiscal 2017. This guidance is based on the following assumptions:
•
Total sales change of (1.3)% to 0.7% which includes sales of approximately $160 million in the 53rd week.
•
Comparable sales change of (2)% to 0%
•
Gross margin as a percentage of sales to increase 10 to 15 basis points over 2016




•
SG&A dollars to increase 0.5% to 2% over 2016. Excluding the 53rd week in 2017, the Company expects SG&A dollars to increase 0% to 1.5%. SG&A dollars in the 53rd week are expected to be approximately $25 million.
•
Depreciation expense of $960 million
•
Interest expense of $300 million
•
Effective tax rate of 37.5%
•
$350 million in share repurchases
•
Capital expenditures of $700 million

Fourth Quarter 2016 Earnings Conference Call
Kohl's will host its quarterly earnings conference call at 8:30 am ET on February 23, 2017. The phone number for the conference call is (800) 230-1074. Replays of the call will be available for 30 days by dialing (800) 475-6701.  The conference ID is 386532. 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 2017 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 $600 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 and how to join our winning team, visit Corporate.Kohls.com

Contacts
Investor Relations:
Wes McDonald, Chief Financial Officer, (262) 703-1893

Media:
Jen Johnson, VP, Corporate Communications, (262) 703-5241












KOHL’S CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
 
Three Months
Twelve Months
(Dollars in Millions, Except per Share Data)
Jan 28,
2017
Jan 30,
2016
Jan 28,
2017
Jan 30,
2016
Net sales
$
6,205

$
6,387

$
18,686

$
19,204

Cost of merchandise sold
4,133

4,275

11,944

12,265

Gross margin
2,072

2,112

6,742

6,939

As a percent of net sales
33.4
%
33.1
%
36.1
%
36.1
%
Operating expenses:
 
 
 
 
Selling, general, and administrative
1,360

1,332

4,435

4,452

As a percent of net sales
21.9
%
20.9
%
23.7
%
23.2
%
Depreciation and amortization
239

239

938

934

Impairments, store closing and other costs

—

—

186

—

Operating income
473

541

1,183

1,553

Interest expense, net
75

79

308

327

Loss on extinguishment of debt
—

—

—

169

Income before income taxes
398

462

875

1,057

Provision for income taxes
146

166

319

384

Net income
$
252

$
296

$
556

$
673

 
 
 
 
 
Average number of shares:
 
 
 
 
Basic
174

187

178

193

Diluted
175

187

179

195

 
 
 
 
 
Net income per share:
 
 
 
 
Basic
$
1.45

$
1.58

$
3.12

$
3.48

Diluted
$
1.44

$
1.58

$
3.11

$
3.46

 
 
 
 
 
Excluding non-recurring items*:
 
 
 
 
Net income
$
252

$
296

$
673

$
781

Diluted net income per share
$
1.44

$
1.58

$
3.76

$
4.01

*Excludes Impairments, store closing and other costs in 2016 and Loss on extinguishment of debt in 2015.




















KOHL’S CORPORATION
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Dollars in Millions)
January 28, 2017
January 30, 2016
Assets
 
 
Current assets:
 
 
Cash and cash equivalents
$
1,074

$
707

Merchandise inventories
3,795

4,038

Other
378

331

Total current assets
5,247

5,076

Property and equipment, net
8,103

8,308

Other assets
224

222

Total assets
$
13,574

$
13,606

 
 
 
Liabilities and Shareholders' Equity
 
 
Current liabilities:
 
 
Accounts payable
$
1,507

$
1,251

Accrued liabilities
1,224

1,206

Income taxes payable
112

130

Current portion of capital lease and financing obligations
131

127

Total current liabilities
2,974

2,714

Long-term debt
2,795

2,792

Capital lease and financing obligations
1,685

1,789

Deferred income taxes
272

257

Other long-term liabilities
671

563

Shareholders' equity
5,177

5,491

Total liabilities and shareholders' equity
$
13,574

$
13,606





























KOHL’S CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in Millions)
2016
2015
Operating activities
 
 
Net income
$
556

$
673

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
Depreciation and amortization
938

934

Excess tax benefits from share-based compensation
(5
)
(10
)
Share-based compensation
41

48

Deferred income taxes
13

(38
)
Loss on extinguishment of debt
—

169

Impairments, store closing and other costs
57

—

Other non-cash revenues and expenses
30

24

Changes in operating assets and liabilities:
 
 
Merchandise inventories
249

(215
)
Other current and long-term assets
(45
)
43

Accounts payable
256

(260
)
Accrued and other long-term liabilities
81

53

Income taxes
(23
)
53

Net cash provided by operating activities
2,148

1,474

Investing activities
 
 
Acquisition of property and equipment
(768
)
(690
)
Other
12

9

Net cash used in investing activities
(756
)
(681
)
Financing activities
 
 
Treasury stock purchases
(557
)
(1,001
)
Shares withheld for restricted shares
(17
)
(27
)
Dividends paid
(358
)
(349
)
Proceeds from issuance of debt
—

1,088

Reduction of long-term borrowings
—

(1,085
)
Premium paid on redemption of debt
—

(163
)
Proceeds from financing obligations
11

1

Capital lease and financing obligation payments
(127
)
(114
)
Proceeds from stock option exercises
18

147

Excess tax benefits from share-based compensation
5

10

Net cash used in financing activities
(1,025
)
(1,493
)
Net increase (decrease) in cash and cash equivalents
367

(700
)
Cash and cash equivalents at beginning of period
707

1,407

Cash and cash equivalents at end of period
$
1,074

$
707