EX-99.1 2 exh991.htm PRESS RELEASE

Exhibit 99.1


National & Retail Trades and First Call, Release: August 16, 2007 at 4:00 PM (EDT)



KOHL'S CORPORATION REPORTS 20.3 PERCENT INCREASE IN SECOND
QUARTER EARNINGS PER SHARE OF $0.83


Management Raises FY 2007 Guidance


MENOMONEE FALLS, WI … August 16/BUSINESS WIRE/Kohl’s Corporation (NYSE:KSS). Kohl’s Corporation today reported net sales and earnings for the second quarter ended August 4, 2007.


Kohl’s Corporation second quarter earnings per diluted share increased 20.3 percent to $0.83 from $0.69 in last year’s period.  Net income was $269.2 million compared with $232.4 million a year ago, an increase of 15.9 percent.  Net sales increased to $3.6 billion from $3.3 billion a year ago, an increase of 8.7 percent for the quarter.  Comparable store sales increased 1.3 percent for the same period.


For the six months ended August 4, 2007, net income increased 19.7 percent to $478.2 million or $1.48 per diluted share, compared to $399.6 million or $1.17 per diluted share for the six months ended July 29, 2006. Net sales increased 10.2 percent to $7.2 billion from $6.5 billion a year ago. Comparable store sales increased 2.5 percent for the same period.

Larry Montgomery, Kohl’s chairman and chief executive officer, said, “After a strong start to the quarter in May, our sales performance was affected by the performance of our seasonal businesses in June and July.  Strength in our other businesses remained consistent and our early read on back-to-school is positive.  We continue to achieve improvement in our operating margin in excess of both our short-term and long-range goals.”

Montgomery added, “I am very proud of our associates and the role they played in delivering these results and want to thank them for their hard work, loyalty and dedication to serving our customers.  They are the reason you can continue to ‘expect great things’ from Kohl’s.”


Earnings Guidance

The Company issued its initial guidance for the third and fourth quarter of fiscal 2007.  Assuming a comparable sales increase of 2% to 4%, the Company would expect earnings per diluted share of $0.67 to $0.71 in the third quarter.  For the fourth quarter, assuming comparable sales of 1% to 3%, the Company would expect earnings per diluted share of $1.63 to $1.69.  This would result in earnings per diluted share of $3.77 to $3.87 for fiscal 2007 versus its previous guidance of $3.75 to $3.87 per diluted share.


Expansion Update


During the first half of the 2007 fiscal year, the Company successfully opened 17 new stores, including its entry into the Idaho market with three stores.


The Company now operates 834 stores in 46 states, compared with 749 stores in 43 states at the same time last year.




The Company will open 95 stores in the third and fourth quarters for a total of 112 new stores for fiscal 2007.


Second Quarter Earnings Conference Call


Investors will have the opportunity to listen to the conference call scheduled for 5:00 PM EDT on August 16 by dialing (913) 905-3179 (Pass Code: 3406251) ten minutes prior to the start of the call.  A replay of the conference call will be accessible from 8 PM EDT August 16 through midnight September 14, 2007, by dialing (719) 457-0820 (Pass Code: 3406251).


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 “Investor Relations” / “Calendar of Events”), or through Premiere Global’s web site at https://cis.premconf.com/sc/scw.dll/usr?cid=vlllrcrxrdzvsnsns.  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.  The web cast will be available for 30 days on both web sites.


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)

Subject to Reclassification


 

 

 

 

 

Three Months

 

Six Months

 

 

 

 

 

(13 Weeks) Ended

 

(26 Weeks) Ended

 

 

 

 

 

 

% to

 

 

% to

 

 

% to

 

 

% to

 

August 4,

Net

 

July 29,

Net

 

August 4,

Net

 

July 29,

Net

 

2007

Sales

 

2006

Sales

 

2007

Sales

 

2006

Sales

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

 $    3,589.2

 

 

 $     3,301.5

 

 

 $    7,161.3

 

 

 $     6,497.8

 

Cost of merchandise sold

       2,192.8

61.1%

 

        2,062.2

62.5%

 

       4,447.1

62.1%

 

        4,103.1

63.1%

 

 

 

 

 

 

 

 

 

 

 

 

Gross margin

       1,396.4

38.9%

 

        1,239.3

37.5%

 

       2,714.2

37.9%

 

        2,394.7

36.9%

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

  Selling, general, and administrative

          837.8

23.3%

 

          759.8

23.0%

 

       1,696.3

23.7%

 

        1,528.6

23.5%

  Depreciation and amortization

          106.2

3.0%

 

            96.1

2.9%

 

          210.8

3.0%

 

          189.4

3.0%

  Preopening expenses

             8.7

0.2%

 

              8.0

0.2%

 

            17.3

0.2%

 

            19.1

0.3%

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

          443.7

12.4%

 

          375.4

11.4%

 

          789.8

11.0%

 

          657.6

10.1%

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net

            10.5

0.3%

 

              6.0

0.2%

 

            20.7

0.3%

 

            20.2

0.3%

 

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

          433.2

12.1%

 

          369.4

11.2%

 

          769.1

10.7%

 

          637.4

9.8%

Provision for income taxes

          164.0

4.6%

 

          137.0

4.2%

 

          290.9

4.0%

 

          237.8

3.7%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 $       269.2

7.5%

 

 $        232.4

7.0%

 

 $       478.2

6.7%

 

 $        399.6

6.1%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic net income per share

 $         0.84

 

 

 $         0.70

 

 

 $         1.49

 

 

 $         1.18

 

Average number of  shares

          320.5

 

 

          333.4

 

 

          321.1

 

 

          339.3

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted net income per share

 $         0.83

 

 

 $         0.69

 

 

 $         1.48

 

 

 $         1.17

 

Average number of  shares

          323.2

 

 

          335.7

 

 

          324.2

 

 

          341.6

 





Kohl’s Corporation

Condensed Consolidated Statements of Cash Flows

(In Thousands)

(Unaudited)

Subject to Reclassification


 

 

Six Months

 

 

(26 Weeks) Ended

 

 

August 4,

 

July 29,

 

 

2007

 

2006

 

 

 

 

 

Operating activities

 

 

 

Net income

 $  478,177

 

 $  399,602

Adjustments to reconcile net income to net cash

 

 

 

   provided by operating activities

 

 

 

 

Depreciation and amortization

211,100

 

189,645

 

Amortization of debt discount

108

 

108

 

Share-based compensation

25,005

 

21,086

 

Excess tax benefits from share-based compensation

 (6,857)

 

 (13,548)

 

Deferred income taxes

 (3,589)

 

9,279

 

Changes in operating assets and liabilities:

 

 

 

 

    Accounts receivable, net

     -   

 

1,652,065

 

    Merchandise inventories

 (229,781)

 

 (170,581)

 

    Other current and long-term assets

 (35,393)

 

 (74,830)

 

    Accounts payable

140,852

 

182,203

 

    Accrued and other long-term liabilities

160,930

 

122,775

 

    Income taxes

 (93,184)

 

 (49,131)

 

 

 

 

 

Net cash provided by operating activities

647,368

 

2,268,673

 

 

 

 

 

Investing activities

 

 

 

Acquisition of property and equipment

 

 

 

 

and favorable lease rights

 (1,035,007)

 

 (706,489)

Purchases of short-term investments

   (2,933,527)

 

     (6,595,769)

Sales of short-term investments

3,329,201

 

6,236,570

Proceeds from sale of property, plant and equipment

28,700

 

                 -   

Other

 (1,905)

 

 (2,566)

 

 

 

 

 

Net cash used in investing activities

 (612,538)

 

 (1,068,254)

 

 

 

 

 

Financing activities

 

 

 

Net borrowings under credit facilities

295,000

 

         -   

Payments of other long-term debt

 (13,961)

 

 (104,596)

Treasury stock purchases

 (374,362)

 

 (1,100,809)

Excess tax benefits from share-based compensation

6,857

 

13,548

Proceeds from stock option exercises

92,387

 

27,406

 

 

 

 

 

Net cash provided by (used in) financing activities

5,921

 

 (1,164,451)

 

 

 

 

 

Net increase in cash and cash equivalents

 40,751

 

 35,968

Cash and cash equivalents at beginning of period

189,170

 

126,839

 

 

 

 

 

Cash and cash equivalents at end of period

 $ 229,921

 

 $ 162,807

 

 

 

 

 




Kohl’s Corporation

Condensed Consolidated Balance Sheets

(In Thousands)

(Unaudited)

Subject to Reclassification



 

August 4,

 

July 29,

 

2007

 

2006

 

 

 

 

Assets

 

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

 $ 229,921

 

 $162,807

 

Short-term investments

35,556

 

519,276

 

Merchandise inventories

2,817,880

 

2,408,149

 

Deferred income taxes

 46,733

 

10,591

 

Other current assets

159,123

 

156,372

 

 

 

 

 

 

 

 

Total current assets

3,289,213

 

 3,257,195

 

 

 

 

 

 

Property and equipment, net

6,190,119

 

5,104,521

Favorable lease rights, net

213,554

 

226,108

Goodwill

9,338

 

9,338

Other assets

60,978

 

51,504

 

 

 

 

 

 

 

 

Total assets

 $  9,763,202

 

 $ 8,648,666

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Shareholders' Equity

 

 

 

Current liabilities:

 

 

 

 

Accounts payable

 $  1,075,228

 

 $ 1,012,174

 

Accrued liabilities

870,703

 

731,008

 

Income taxes payable

 133,223

 

104,229

 

Short-term debt

295,000

 

   -   

 

Current portion of long-term debt and capital leases

10,866

 

8,243

 

 

 

 

 

 

 

 

Total current liabilities

2,385,020

 

1,855,654

 

 

 

 

 

 

Long-term debt and capital leases

1,040,847

 

 1,041,314

Deferred income taxes

246,484

 

213,994

Other long-term liabilities

258,388

 

219,199

Shareholders' equity

5,832,463

 

5,318,505

 

 

 

 

 

 

 

 

Total liabilities and shareholders' equity

 $  9,763,202

 

 $ 8,648,666