EX-99.1 2 exh991.htm PRESS RELEASE

Exhibit 99.1


National & Retail Trades and First Call, Release: November 9, 2006 at 4:00 PM (EST)




KOHL'S CORPORATION REPORTS THIRD QUARTER EARNINGS


Earnings per Share Increased 51 Percent to $0.68 Per Diluted Share

Total Year EPS Guidance Raised to $3.16 to $3.24 Per Diluted Share


MENOMONEE FALLS, WI … November 9/BUSINESS WIRE/Kohl’s Corporation (NYSE:KSS)


Third Quarter 2006 Highlights


·

Net Income increased 45 percent, or 120 basis points as a percent of net sales

·

Comparable sales increased 8.5 percent

·

Opened 65 stores – the largest one-day opening in Company history


Kohl’s Corporation today reported net sales and earnings for the three months and nine months ended October 28, 2006.


Kohl’s Corporation reported earnings per diluted share for the quarter ended October 28, 2006 of $0.68 versus $0.45 a year ago, a 51 percent increase.  Net income was $224.5 million compared to $155.1 million a year ago, a 45 percent increase.   Net sales for the quarter increased 16.6 percent to $3.6 billion from $3.1 billion a year ago while comparable store sales increased 8.5 percent.  


For the nine months ended October 28, 2006, net income increased 34 percent to $624.1 million or $1.85 per diluted share, compared to $467.0 million or $1.35 per diluted share for the nine months ended October 29, 2005. Net sales increased 15.6 percent to $10.1 billion from $8.8 billion a year ago. Comparable store sales increased 6.9 percent for the same period.

Larry Montgomery, Kohl’s chairman and chief executive officer, said, “We are extremely pleased with our performance for the third quarter.  We delivered solid top-line growth and outstanding profitability.  We continue to see consistency in all lines of business and all regions of the country.  This has allowed us to generate profitable market share growth.  We believe we have great momentum entering the fourth quarter.”

Montgomery added, “Our associates are critical to our success as a company and I want to thank them for their hard work, loyalty, and commitment to customer service.  I especially want to thank them for the role they played in opening 65 new stores in one day – the largest grand opening in our history.  They are the reason you can continue to ‘expect great things’ from Kohl’s.”


Earnings Guidance


As a result of its third quarter performance, the Company is raising its full-year earnings guidance from $3.04 to $3.13 per diluted share to $3.16 to $3.24 per diluted share for fiscal 2006.  This would result in an increase in earnings per diluted share of 30 percent to 33 percent over last year.  The Company reaffirmed its guidance for the fourth fiscal quarter of $1.36 to $1.42 per diluted share.



Expansion Update


During the month of October, the Company opened sixty-five new stores in thirty states across the Country.  This was the Company’s largest one-day opening in its history.  The Company operated 814 stores in 45 states as of October 28, 2006, compared with 731 stores in 41 states at the same time last year.


The Company opened three additional stores in November.  This completed the opening of 85 stores in fiscal 2006.  The Company now operates 817 stores in 45 states.


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 (913) 905-3179, using Confirmation Code 4773974, at least ten minutes prior to the call.


In addition, the call will be web cast live over the Internet through the Company’s web site located at http://www.kohls.com (see “Company News”), or through Premiere Global Services’ web site at https://cis.premconf.com/sc/scw.dll/usr?cid=vlllrzlncnsvwxlcl. To listen to the call, please go to either web site at least fifteen minutes early to register, download and install any necessary audio software. A replay of the call will be available for 30 days.  To access this replay, dial (719) 457-0820, and use Pass Code: 4773974.


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.

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

Media Contact:

Vicki Shamion, Vice President – 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 28
2006


% to

 Net
Sales



October 29,

2005


% to

 Net
Sales



October 28,

2006


% to

 Net
Sales



October 29,

2005


% to

 Net
Sales

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

$  3,637.3

 

 

 

$   3,119.4

 

 

 

$ 10,113.4

 

 

 

 $ 8,750.3

 

 

Cost of merchandise sold

2,288.2

 

 

 

1,986.8

 

 

 

6,378.0

 

 

 

     5,565.9

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross margin

1,349.1

 

37.1%

 

1,132.6

 

36.3%

 

3,735.4

 

36.9%

 

3,184.4

 

36.4%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative

856.9

 

23.6%

 

753.8

 

24.2%

 

2,377.1

 

23.5%

 

     2,099.2

 

24.0%

Depreciation and amortization

94.3

 

2.6%

 

85.1

 

2.7%

 

283.7

 

2.8%

 

       247.7

 

2.8%

Preopening expenses

28.5

 

0.7%

 

26.3

 

0.8%

 

47.6

 

0.4%

 

         43.0

 

0.5%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

369.4

 

10.2%

 

267.4

 

8.6%

 

1,027.0

 

10.2%

 

794.5

 

9.1%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net

10.2

 

0.3%

 

18.0

 

0.6%

 

30.4

 

0.3%

 

         51.5

 

0.6%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

359.2

 

9.9%

 

249.4

 

8.0%

 

996.6

 

9.9%

 

       743.0

 

8.5%

Provision for income taxes

134.7

 

3.7%

 

94.3

 

3.0%

 

372.5

 

3.7%

 

276.0

 

3.2%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$     224.5

 

6.2%

 

$     155.1

 

5.0%

 

$      624.1

 

6.2%

 

 $    467.0

 

5.3%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic net income per share

$       0.69

 

 

 

$       0.45

 

 

 

$1.86

 

 

 

 $      1.36

 

 

Avg. number of shares

 

326.9

 

 

 

344.4

 

 

 

335.1

 

 

 

344.0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted net income per share

 

$       0.68

 

 

 

$       0.45

 

 

 

$1.85

 

 

 

 $      1.35

 

 

Avg. number of shares

 

329.8

 

 

 

346.8

 

 

 

338.3

 

 

 

346.6

 

 





Kohl’s Corporation

Condensed Consolidated Statements of Cash Flows

(In Thousands)

(Unaudited)

Subject to Reclassification


 

 

 

 

 

 

9 Months Ended

 

 

 

 

October 28,
2006

 

October 29,
2005

Operating activities

 

 

 

 

 

 

Net income

 

 

 

 

$     624,098

 

 $     467,047

Adjustments to reconcile net income to net cash

  provided by operating activities:

 

 

 

 

 

Depreciation and amortization

 

 

284,185

 

248,268

 

Amortization of debt discount

 

 

162

 

163

 

Deferred income taxes

 

 

29,448

 

31,735

 

Share-based compensation

 

31,507

 

32,535

 

Excess tax benefits from share-based compensation

 

(20,480)

 

(9,859)

 

Changes in operating assets and liabilities:

 

 

 

 

 

  Accounts receivable, net

 

 

1,652,065

 

(102,518)

 

  Merchandise inventories

 

 

(1,013,653)

 

(907,340)

 

  Other current and long-term assets

 

 

(65,002)

 

(32,406)

 

  Accounts payable

 

 

812,464

 

625,729

 

  Accrued and other long-term liabilities

 

145,760

 

24,833

 

  Income taxes payable

 

 

 

(89,931)

 

(114,739)

 

 

 

 

 

 

 

 

 

Net cash provided by operating activities

 

 

2,390,623

 

263,448

Investing activities

 

 

 

 

 

 

 

Acquisition of property and equipment

  and favorable lease rights

 

 

(964,511)

 


(690,205)

Net (purchases) sales of short-term investments

 

 

(158,915)

 

88,765

Other

 

 

(3,856)

 

(3,362)

Net cash used in investing activities

 

(1,127,282)

 

(604,802)

Financing activities

 

 

 

 

 

 

Proceeds from short-term debt

 

 

-

 

225,000

Borrowings under credit facilities

 

 

-

 

106,500

Excess tax benefits from share-based compensation

 

 

20,480

 

9,859

Payments of other long-term debt

 

 

(107,248)

 

(3,779)

Treasury stock purchases

 

 

(1,167,916)

 

  -   

Proceeds from stock option exercises

 

 

63,190

 

19,770

 

 

 

 

 

 

Net cash (used in) provided by financing activities

 

(1,191,494)

 

357,350

Net increase in cash and cash equivalents

 

71,847

 

15,996

Cash and cash equivalents at beginning of period

 

126,839

 

116,717

 

 

 

 

 

 

 

 

 

Cash and cash equivalents at end of period

 

 

$     198,686

 

 $     132,713

 

 

 

 

 

 





Kohl’s Corporation

Condensed Consolidated Balance Sheets

(In Thousands)

(Unaudited)

Subject to Reclassification


 

 

 


October 28,

2006

 


October 29,

2005

Assets

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

$         198,686

 

 $         132,713

Short-term investments

 

318,992

 

-

Accounts receivable trade, net

 

-

 

1,492,150

Merchandise inventories

 

3,251,221

 

2,854,317

Deferred income taxes

 

 

20,909

 

16,259

Other current assets

 

 

149,547

 

77,810

Total current assets

 

 

3,939,355

 

           4,573,249

 

 

 

 

 

       

 

 

 

 

 

 

Property and equipment, net

 

5,266,048

 

            4,557,827

Favorable lease rights, net

 

222,724

 

          215,460

Goodwill

 

 

9,338

 

             9,338

Other assets

 

 

57,224

 

           48,353

Total assets

 

 

$    9,494,689

 

$     9,404,227

 

 

 

 

 

 

Liabilities and Shareholders' Equity

 

 

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Accounts payable

 

 

$    1,642,435

 

   $    1,330,384

Accrued liabilities

 

 

744,499

 

          577,296

Income taxes payable

 

 

56,497

 

52,584

Short-term debt

 

-

 

331,500

Current portion of long-term debt and capital leases

 

8,809

 

105,875

Total current liabilities

 

 

2,452,240

 

      2,397,639

 

 

 

 

 

 

Long-term debt and capital leases

 

 

1,040,450

 

      1,040,232

Deferred income taxes

 

 

244,481

 

223,325

Other long-term liabilities

 

228,236

 

179,765

Shareholders’ equity

 

 

5,529,282

 

       5,563,266

Total liabilities and shareholders’ equity

$     9,494,689

 

$     9,404,227