EX-99.1 2 exh991.htm PRESS RELEASE National & Retail Trades and First Call

Exhibit 99.1


National & Retail Trades and First Call, Release: November 11, 2004 at 4:00 PM (EST)



KOHL'S CORPORATION REPORTS THIRD QUARTER EARNINGS


MENOMONEE FALLS, WI … November 11/BUSINESS WIRE/Kohl’s Corporation (NYSE:KSS). Kohl’s Corporation today reported results for the three months and nine months ended October 30, 2004.


Kohl’s Corporation reported an 18.7 percent increase in net income for the quarter ended October 30, 2004. Net income was $143.8 million, or $0.42 per diluted share, compared with $121.2 million or $0.35 per diluted share a year ago.  Net sales increased to $2.7 billion from $2.4 billion a year ago, an increase of 14.6 percent for the quarter. Comparable store sales increased 1.2 percent for the same period.


For the nine months ended October 30, 2004, net income increased 20.0 percent to $413.3 million or $1.20 per diluted share, compared with $344.3 million or $1.00 per diluted share a year ago. Net sales increased 13.4 percent to $7.6 billion from $6.7 billion a year ago.  Comparable store sales were flat to last year.


Larry Montgomery, Kohl’s chairman and chief executive officer, said, “We are pleased with the progress made on the four initiatives we have been focused on all year.  We are particularly excited about the customers’ response to the new merchandise launches in the third quarter.  We believe we are well-positioned for the holiday season in terms of content and level of inventory, our in-store shopping environment and our marketing and advertising calendar.”


Montgomery added, “I am very proud of our over 100,000 associates and the role they played in helping the company achieve a successful third quarter and want to thank them for their hard work and dedication to serving our customers.”

Expansion Update


The Company successfully opened 48 new stores during the quarter. The Company entered 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 added 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.  


The Company now operates 637 stores in 40 states, compared with 542 stores in 36 states at the same time last year.


The Company plans to open approximately 95 stores in fiscal 2005 with approximately 33 stores opening during the first quarter.  






Third Quarter Earnings Conference Call


Investors will have the opportunity to listen to the third quarter earnings conference call today at 5:00 PM (EST) 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 36-hour telephone replay of the call, simply dial 630-652-3018.  (Pass Code: 10045878).

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


###










KOHL'S CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In Millions, except per share data)

(Unaudited)

                 
  

3 Months Ended

9 Months Ended

  


October 30,

2004

% to

 Net Sales


November 1,

2003

% to

 Net Sales


October 30,

2004

% to

 Net Sales


November 1,

2003

% to

 Net Sales

                 

Net sales

 

 $ 2,743.9

   

 $ 2,394.0

   

 $ 7,621.9

   

 $ 6,720.2

  

Cost of merchandise sold

1,758.3

 

64.1%

 

    1,578.7

 

65.9%

 

     4,878.9

 

64.0%

 

    4,426.8

 

65.9%

                 

Gross margin

985.6

 

35.9%

 

815.3

 

34.1%

 

2,743.0

 

36.0%

 

2,293.4

 

34.1%

                

Operating expenses

               

Selling, general and administrative

       646.5

 

23.6%

 

       524.0

 

21.9%

 

     1,781.3

 

23.4%

 

1,471.9

 

21.9%

Depreciation and amortization

         71.6

 

2.6%

 

         59.9

 

2.5%

 

       208.3

 

2.7%

 

172.3

 

2.6%

Preopening expenses

21.3

 

0.7%

 

20.8

 

0.9%

 

         43.8

 

0.6%

 

38.9

 

0.5%

                 

Operating income

       246.2

 

9.0%

 

       210.6

 

8.8%

 

709.6

 

9.3%

 

       610.3

 

9.1%

                 

Interest expense, net

15.0

 

0.6%

 

         15.8

 

0.7%

 

         45.1

 

0.6%

 

          56.7

 

0.9%

                 

Income before income taxes

       231.2

 

8.4%

 

       194.8

 

8.1%

 

       664.5

 

8.7%

 

       553.6

 

8.2%

Provision for income taxes

87.4

 

3.2%

 

73.6

 

3.0%

 

251.2

 

3.3%

 

       209.3

 

3.1%

                 

Net income

 

 $    143.8

 

5.2%

 

 $    121.2

 

5.1%

 

 $    413.3

 

5.4%

 

 $    344.3

 

5.1%

                 
                 
                 

Basic net income per share

 $      0.42

   

 $      0.36

   

 $      1.21

   

 $      1.02

  

Avg. number of shares

 

342.3

   

339.8

   

341.3

   

338.9

  
                 

Diluted net income per share

 

 $      0.42

   

 $      0.35

   

 $      1.20

   

 $      1.00

  

Avg. number of shares

 

344.9

   

344.4

   

343.7

   

343.4

  
  
  








Kohl's Corporation

Condensed Consolidated Balance Sheets

(In Thousands)

(Unaudited)

Subject to Reclassification

      
   

October 30,

2004

 

November 1,

 2003

      

Assets

     

Current assets:

     

Cash and cash equivalents

 

 $       111,720

 

 $         108,532

Accounts receivable trade, net

 

1,284,734

 

1,048,711

Merchandise inventories

  

       2,640,348

 

2,424,802

Deferred income taxes

  

           40,953

 

39,307

Other

  

77,919

 

           85,454

Total current assets

  

 4,155,674

 

       3,706,806

      

Property and equipment, net

 

       3,844,858

 

       3,137,052

Favorable lease rights, net

 

          228,030

 

          183,809

Goodwill

  

             9,338

 

             9,338

Other assets

  

          106,774

 

           103,480

Total assets

  

 $    8,344,674

 

 7,140,485

      

Liabilities and Shareholders' Equity

    
      

Current liabilities:

     

Accounts payable

  

  $        1,346,486

 

   $       1,118,091

Accrued liabilities

  

447,422

 

          316,285

Income taxes payable

  

           9,507

 

           63,016

Short-term debt

 

354,000

 

313,000

Current portion of long-term debt and capital leases

 

           3,380

 

12,611

Total current liabilities

  

       2,160,795

 

         1,823,003

      

Long-term debt and capital leases

  

       1,104,283

 

       1,079,637

Deferred income taxes

  

318,461

 

228,418

Other long-term liabilities

 

           77,714

 

           71,161

Shareholders’ equity

  

       4,683,421

 

       3,938,266

Total liabilities and shareholders’ equity

 $    8,344,674

 

 $    7,140,485









Kohl's Corporation

Condensed Consolidated Statements of Cash Flows

(In Thousands)

(Unaudited)

Subject to Reclassification

         
      

9 Months Ended

      

October 30,

 2004

 

November 1,

 2003

         

Operating activities

      
         

Net income

    

 $    413,345

 

 $    344,328

Adjustments to reconcile net income to net cash

    

  provided by operating activities:

     
 

Depreciation and amortization

  

       208,883

 

         179,175

 

Amortization of debt discount

  

           161

 

           3,521

 

Deferred income taxes

  

         90,618

 

         73,853

 

Changes in operating assets and liabilities:

    
 

  Accounts receivable, net

  

         (134,577)

 

(57,901)

 

  Merchandise inventories

  

       (1,033,358)

 

     (797,806)

 

  Other current assets

  

       (7,082)

 

       (41,740)

 

  Accounts payable

  

           813,887

 

       467,360

 

  Accrued and other long-term liabilities

 

       11,165

 

(37,255)

 

  Income taxes

   

       (89,107)

 

       (38,774)

         

Net cash provided by operating activities

  

       273,935

 

94,761

         

Investing activities

       
         

Acquisition of property and equipment

     

     and favorable lease rights

  

     (669,266)

 

     (530,197)

Net sales of short-term investments

  

       34,285

 

       475,991

Other

     

       (23,533)

 

       (18,032)

Net cash used in investing activities

 

        (658,514)

 

(72,238)

         

Financing activities

      
         

Net borrowings under credit facilities

  

354,000

 

313,000

Payments of convertible and other long-term debt

  

(12,400)

 

(358,552)

Payments of financing fees on debt

  

            (73)

 

            (185)

Proceeds from stock option exercises

  

         42,024

 

41,661

         


Net cash provided by (used in) financing activities

 


     383,551

 

           

(4,076)

         

Net (decrease) increase in cash and cash equivalents

 

         (1,028)

 

       18,447

Cash and cash equivalents at beginning of period

 

         112,748

 

       90,085

         

Cash and cash equivalents at end of period

  

 $    111,720

 

 $      108,532