EX-99.1 2 exh991.htm

Exhibit 99.1



National & Retail Trades and First Call, Release: August 12, 2004 at 4:00 PM (EST)



KOHL'S CORPORATION REPORTS SECOND QUARTER NET INCOME INCREASE OF 39% AND EARNINGS PER SHARE OF $0.45


MENOMONEE FALLS, WI … August 12/BUSINESS WIRE/Kohl’s Corporation (NYSE:KSS). Kohl’s Corporation today reported net sales and earnings for the second quarter ended July 31, 2004.


Kohl’s Corporation reported a 39 percent increase in net income for the quarter ended July 31, 2004.   Net income was $155.8 million, or $0.45 per diluted share compared with $112.1 million or $0.33 per diluted share a year ago.  Net sales increased 13.1 percent to $2.5 billion for the quarter.  Comparable store sales decreased 1.1 percent for the same period.


For the six months ended July 31, 2004, net income increased 21 percent to $269.6 million or $0.78 per diluted share, compared with $223.2 million or $0.65 per diluted share for the six months ended August 2, 2003.  Net sales increased 12.8 percent to $4.9 billion from $4.3 billion a year ago.  Comparable store sales decreased 0.5 percent for the same period.

 

Larry Montgomery, Kohl’s chairman and chief executive officer, said, “We have made significant progress on our 2004 initiatives as evidenced by our strong earnings performance for the quarter. We are very comfortable with the level and content of our inventory and the controls we have in place to maintain the appropriate level.  At the same time, our in-store efforts to create a better shopping environment have been well received by the customer.”


Montgomery added, “We have seen continued improvement in the selling of new receipts throughout the second quarter.  This fact, along with our planned new merchandise launches throughout the third quarter, gives us confidence that we will return to positive comparable store sales increases in the third quarter.”

 

Expansion Update


During the first half of the year, the Company successfully opened 47 new stores including entries into the Sacramento, CA; San Diego, CA; Fresno, CA; and Memphis, TN markets.


The Company now operates 589 stores in 38 states, compared with 492 stores in 34 states at the same time last year.


The Company plans to open another 48 stores in the third quarter of fiscal 2004, seven in August and 41 in October. The Company plans to enter the San Francisco, CA market with 11 stores; the Salt Lake City, UT market with five stores; the Rochester, NY market with three stores; the Portland, ME market with two stores; the Reno, NV market with two stores and the Montgomery, AL market with one store. In addition, the Company will add nine stores in the Midwest region, six stores in the Northeast region, five stores in the Southwest region, three stores in the South Central region and one store in the Southeast region.  In total, the Company plans to open 95 stores in fiscal 2004.


In fiscal 2005, the Company plans to open another 95 stores with approximately half of the stores opening during the first quarter.











Second Quarter Earnings Conference Call



Investors will have the opportunity to listen to the second quarter earnings conference call today at 5:00 PM (EDT) by dialing 847-619-6368 ten minutes prior to the start of the call, over the Internet through the Company’s web site located at http://www.kohls.com (see “Company News”), or through Broadcast Networks’ Vcall web site located at http://www.vcall.com.  To listen to the call, please go to either web site at least 15 minutes early to register, download and install any necessary audio software.  For those who cannot listen to the live broadcast, a replay will be available shortly after the call.  To access a 24-hour telephone replay of the call, simply dial 630-652-3018.  (Pass Code: 9424524).



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.  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 on Exhibit 99.1 to 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.

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

Media Contacts:  Vicki Shamion, Director – Public Relations, (262) 703-1464

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KOHLS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In Millions, except per share date)

(Unaudited)



                 
  

3 Months Ended

       

6 Months Ended

      
  


July 31,

2004

 

% to

 Net Sales

 


August 2,

2003

 

% to

 Net Sales

 


July 31,

2004

 

% to

 Net Sales

 


August 2,

2003

 

% to

 Net Sales

                 

Net sales

 

 $ 2,497.9

   

 $ 2,208.5

   

 $ 4,878.0

   

 $ 4,326.2

  

Cost of merchandise sold

 

    1,587.9

 

63.6%

 

    1,471.7

 

66.6%

 

     3,120.5

 

64.0%

 

    2,848.1

 

65.8%

                 

Gross margin

 

910.0

 

36.4%

 

736.8

 

33.4%

 

1,757.5

 

36.0%

 

1,478.1

 

34.2%

                 

Operating expenses

                

Selling, general and administrative

 

       569.1

 

22.8%

 

       473.8

 

21.5%

 

     1,134.8

 

23.3%

 

948.0

 

21.9%

Depreciation and amortization

 

         70.8

 

2.8%

 

         57.0

 

2.6%

 

       136.8

 

2.8%

 

112.4

 

2.7%

Preopening expenses

 

4.7

 

0.2%

 

2.5

 

0.1%

 

         22.5

 

0.4%

 

18.0

 

0.4%

                 

Operating income

 

       265.4

 

10.6%

 

       203.5

 

9.2%

 

463.4

 

9.5%

 

       399.7

 

9.2%

                 

Interest expense, net

 

 15.0

 

0.6%

 

         23.2

 

1.0%

 

         30.0

 

0.6%

 

          40.9

 

0.9%

                 

Income before income taxes

 

       250.4

 

10.0%

 

       180.3

 

8.2%

 

       433.4

 

8.9%

 

       358.8

 

8.3%

Provision for income taxes

 

         94.6

 

3.8%

 

68.2

 

3.1%

 

163.8

 

3.4%

 

       135.6

 

3.1%

                 

Net income

 

 $    155.8

 

6.2%

 

 $    112.1

 

5.1%

 

 $    269.6

 

5.5%

 

 $    223.2

 

5.2%

                 
                 
                 

Basic net income per share

 

 $      0.46

   

 $      0.33

   

 $      0.79

   

 $      0.66

  

Avg. number of shares

 

341.0

   

339.0

   

340.7

   

338.5

  
                 

Diluted net income per share

 

 $      0.45

   

 $      0.33

   

 $      0.78

   

 $      0.65

  

Avg. number of shares

 

344.2

   

343.7

   

344.0

   

343.1

  
  
  










KOHLS CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(In Thousands)

(Unaudited)


Subject to Reclassification


      
   

July 31,

2004

 

August 2,

 2003

      

Assets

     

Current assets:

     

Cash and cash equivalents

  

 $       105,173

 

 $         107,978

Short-term investments

  

164,043

 

35,036

Accounts receivable trade, net

  

1,093,455

 

950,142

Merchandise inventories

  

       1,776,212

 

1,716,763

Deferred income taxes

  

           37,804

 

34,146

Other

  

82,501

 

           77,347

Total current assets

  

 3,259,188

 

       2,921,412

      

Property and equipment, net

  

       3,666,871

 

       2,980,460

Favorable lease rights, net

  

          230,533

 

          186,088

Goodwill

  

             9,338

 

             9,338

Other assets

  

          106,660

 

           101,887

Total assets

  

 $    7,272,590

 

 $    6,199,185

      

Liabilities and Shareholders' Equity

     
      

Current liabilities:

     

Accounts payable

  

  $        788,707

 

   $       701,852

Accrued liabilities

  

          443,346

 

          295,211

Income taxes payable

  

           106,977

 

           57,542

Current portion of long-term debt and capital leases

  

           2,843

 

12,440

Total current liabilities

  

       1,341,873

 

         1,067,045

      

Long-term debt and capital leases

  

       1,091,421

 

       1,064,174

Deferred income taxes

  

275,318

 

205,257

Other long-term liabilities

  

           75,823

 

           69,245

Shareholders’ equity

  

       4,488,155

 

       3,793,464

Total liabilities and shareholders’ equity

  

 $    7,272,590

 

 $    6,199,185











KOHLS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands)

(Unaudited)


Subject to Reclassification



    
 

6 Months Ended

 

July 31,

 2004

 

August 2,

 2003

    

Operating activities

   
    

Net income

 $    269,569

 

 $    223,158

Adjustments to reconcile net income to net cash

   

  provided by operating activities:

   
 

Depreciation and amortization

       137,160

 

         119,047

 

Amortization of debt discount

           108

 

           3,468

 

Deferred income taxes

         50,624

 

         55,853

 

Changes in operating assets and liabilities:

   
 

  Accounts receivable, net

         56,702

 

40,668

 

  Merchandise inventories

       (169,222)

 

     (89,767)

 

  Other current assets

       (11,664)

 

       (33,633)

 

  Accounts payable

           256,108

 

       51,121

 

  Accrued and other long-term liabilities

       5,198

 

(60,245)

 

  Income taxes

       (17,395)

 

       (52,936)

    

Net cash provided by operating activities

       577,188

 

256,734

    

Investing activities

   
    

Acquisition of property and equipment

   

     and favorable lease rights

     (443,317)

 

     (334,646)

Net (purchases) sales of short-term investments

       (129,758)

 

       440,955

Other

       (16,359)

 

       (13,814)

Net cash (used in) provided by investing activities

        (589,434)

 

92,495

    

Financing activities

   
    

Repayments of convertible and  other long-term debt

     (11,559)

 

       (357,868)

Payments of financing fees on debt

            (62)

 

            (185)

Proceeds from stock option exercises

         16,292

 

26,717

    


Net cash provided by (used in) financing activities


     4,671

 

           (331,336)

    

Net (decrease) increase in cash and cash equivalents

         (7,575)

 

       17,893

Cash and cash equivalents at beginning of period

         112,748

 

       90,085

    

Cash and cash equivalents at end of period

 $    105,173

 

 $      107,978