EX-99.1 2 exh991.htm PRESS RELEASE

Exhibit 99.1


National & Retail Trades and First Call, Release: February 28, 2008 at 4:00 PM (EST)




KOHL'S CORPORATION REPORTS EARNINGS

FOR FOURTH QUARTER AND FISCAL 2007


MENOMONEE FALLS, WI … February 28/BUSINESS WIRE/Kohl’s Corporation (NYSE:KSS). Kohl’s Corporation today reported results for the quarter and year ended February 2, 2008.


Fourth Quarter Results


Kohl’s Corporation reported net income for the quarter ended February 2, 2008 of $411.7 million, or $1.31 per diluted share, compared with $484.6 million, or $1.48 per diluted share, a year ago.  Net sales were $5.5 billion, an increase of 0.7 percent for the quarter.  Comparable store sales for the quarter decreased 4.0 percent.


Fiscal 2006 consisted of 53 weeks, resulting in a 14-week fiscal fourth quarter.  To provide a better measure of the Company’s business trends, the reported comparable store sales results for the quarter and the year compare the periods ended February 2, 2008 to January 27, 2007.  The impact of the 53rd week on total sales was approximately $200 million.



2007 Fiscal Year Results


For the fiscal year ended February 2, 2008, net income was $1.1 billion, or $3.39 per diluted share, compared with $1.1 billion or $3.31 per diluted share, a year ago.  Net sales were $16.5 billion for the year, an increase of 5.6 percent over $15.6 billion a year ago.  On a comparable 52-week basis, comparable store sales decreased 0.8 percent.


Larry Montgomery, Kohl’s chairman and chief executive officer, said, “2007 proved to be a difficult year for most retailers, and Kohl’s was no exception.  Despite a challenging year which saw deep discounts across the industry, our gross margin increased over the prior year as a result of improved inventory management and increased penetration from our private and exclusive brands.  Additionally, we achieved record sales for our sixteenth consecutive year as a public company and increased our diluted earnings per share over last year.”


Montgomery added, “We expect 2008 to be a challenging year from a macro-economic perspective.  We are planning conservatively in our sales expectations, inventory levels and expenses.  We will continue to invest the necessary resources to ensure our profitable growth over the long-run through investments in people and technology.”  


Expansion Update


During the year, Kohl’s successfully opened 112 stores.  The Company ended the year with 929 stores in 47 states, compared with 817 stores in 45 states at the end of 2006.  The Company expects to open approximately 70-75 stores in fiscal 2008, with 28 stores opening this spring.



2008 Earnings Guidance


The Company issued its initial guidance for fiscal 2008.  Based on assumptions of a total sales increase of 5% to 8% and a comparable sales change of 0% to negative 3%, the Company expects earnings per diluted share of $3.15 to $3.50 for the year.  For the first fiscal quarter, the Company expects earnings per diluted share of $0.50 to $0.54.


Fourth Quarter Earnings Conference Call


Investors will have the opportunity to listen to the conference call scheduled for 5:00 PM EST on February 28 by dialing (706) 902-0486 (CONFERENCE ID 34081229).  The replay of the conference call will also be accessible from 8 PM EST February 28 until midnight March 28, 2008, by dialing (706)645-9291 (CONFERENCE ID 34081229).


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").  To participate in the conference, register at http://audioevent.mshow.com/341853/, using CONFERENCE ID 34081229, at least ten minutes prior to the call to download and install any necessary audio software.  The web cast will be available for 30 days.


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.

About Kohl’s

Based in Menomonee Falls, Wis., Kohl’s (NYSE: KSS) is a family-focused, value-oriented specialty department store offering moderately priced, exclusive and national brand apparel, shoes, accessories, beauty and home products in an exciting shopping environment. A company committed to the communities it serves, Kohl’s operates 929 stores in 47 states and has raised more than $85 million for children’s initiatives nationwide through its Kohl’s Cares for Kids® philanthropic program.  For a list of store locations and information, or for the added convenience of shopping online, visit www.kohls.com.



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

Consolidated Statements of Income

(In Millions, except per share data)


 

 

 

 

 

February 2,

% to

 

February 3,

% to

 

 

 

 

 

2008

Net

 

2007

Net

 

 

 

 

 

(13 Weeks)

Sales

 

(14 Weeks)

Sales

 

 

 

 

 

 

 

 

 

 

Net sales

 

 

 

 $    5,487.3

 

 

 $     5,448.6

 

Cost of merchandise sold

 

       3,605.4

65.7%

 

        3,519.4

64.6%

 

 

 

 

 

 

 

 

 

 

Gross margin

 

 

       1,881.9

34.3%

 

        1,929.2

35.4%

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

Selling, general, and administrative

       1,066.9

19.4%

 

        1,035.3

19.0%

 

Depreciation and amortization

          126.1

2.3%

 

          104.0

1.9%

 

Preopening expenses

 

             5.1

0.1%

 

              2.1

0.0%

 

 

 

 

 

 

 

 

 

 

Operating income

 

 

          683.8

12.5%

 

          787.8

14.5%

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

            23.0

0.5%

 

            10.0

0.2%

 

 

 

 

 

 

 

 

 

 

Income before income taxes

          660.8

12.0%

 

          777.8

14.3%

Provision for income taxes

 

          249.1

4.5%

 

          293.2

5.4%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

 

 $       411.7

7.5%

 

 $        484.6

8.9%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic net income per share

 $         1.32

 

 

 $         1.49

 

Average number of  shares

 

          312.9

 

 

          324.5

 

 

 

 

 

 

 

 

 

 

 

Diluted net income per share

 $         1.31

 

 

 $         1.48

 

Average number of  shares

 

          313.8

 

 

          327.8

 

 

 

 

 

 

 

 

 

 

 




Kohl's Corporation

Consolidated Statements of Income

(In Millions, except per share data)


 

 

 

 

 

February 2,

% to

 

February 3,

% to

 

 

 

 

 

2008

Net

 

2007

Net

 

 

 

 

 

(52 Weeks)

Sales

 

(53 Weeks)

Sales

 

 

 

 

 

 

 

 

 

 

Net sales

 

 

 

 $   16,473.7

 

 

 $   15,596.9

 

Cost of merchandise sold

 

     10,459.5

63.5%

 

        9,922.1

63.6%

 

 

 

 

 

 

 

 

 

 

Gross margin

 

 

       6,014.2

36.5%

 

        5,674.8

36.4%

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

Selling, general, and administrative

       3,696.8

22.4%

 

        3,422.6

21.9%

 

Depreciation and amortization

          452.1

2.7%

 

          387.7

2.5%

 

Preopening expenses

 

            60.8

0.4%

 

            49.7

0.4%

 

 

 

 

 

 

 

 

 

 

Operating income

 

 

       1,804.5

11.0%

 

        1,814.8

11.6%

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

            62.4

0.4%

 

            40.4

0.2%

 

 

 

 

 

 

 

 

 

 

Income before income taxes

       1,742.1

10.6%

 

        1,774.4

11.4%

Provision for income taxes

 

          658.2

4.0%

 

          665.7

4.3%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

 

 $    1,083.9

6.6%

 

 $     1,108.7

7.1%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic net income per share

 $         3.41

 

 

 $         3.34

 

Average number of  shares

 

          318.1

 

 

          332.3

 

 

 

 

 

 

 

 

 

 

 

Diluted net income per share

 $         3.39

 

 

 $         3.31

 

Average number of  shares

 

          320.1

 

 

          334.8

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 




KOHL'S CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands)

Subject to Reclassification


 

 

February 2,

 

February 3,

 

 

2008

 

2007

 

 

(52 Weeks)

 

(53 Weeks)

 

 

 

 

 

Operating activities

 

 

 

Net income

 $   1,083,851

 

 $ 1,108,681

Adjustments to reconcile net income to net cash

 

 

 

   provided by operating activities:

 

 

 

 

Depreciation and amortization, including debt discount

        453,171

 

       388,515

 

Share-based compensation

          53,607

 

         44,699

 

Excess tax benefits from share-based compensation

           (6,151)

 

        (25,707)

 

Deferred income taxes

         (11,958)

 

          9,216

 

Other non-cash revenues and expenses

          33,700

 

         31,477

 

Changes in operating assets and liabilities:

 

 

 

 

    Accounts receivable, net

                 -   

 

    1,652,065

 

    Merchandise inventories

       (275,025)

 

      (349,663)

 

    Other current and long-term assets

         (44,329)

 

        (65,348)

 

    Accounts payable

         (98,391)

 

       104,405

 

    Accrued and other long-term liabilities

        148,746

 

       129,821

 

    Income taxes

       (102,858)

 

         92,062

 

 

 

 

 

Net cash provided by operating activities

     1,234,363

 

    3,120,223

 

 

 

 

 

Investing activities

 

 

 

Acquisition of property and equipment

 

 

 

 

and favorable lease rights

    (1,541,683)

 

   (1,163,092)

Purchases of short-term investments

    (9,198,942)

 

 (13,509,169)

Sales of short-term investments

     9,147,044

 

  13,238,936

Proceeds from sale of property, plant and equipment

          30,197

 

               -   

Other

       (4,387)

 

         (6,856)

 

 

 

 

 

Net cash used in investing activities

    (1,567,771)

 

   (1,440,181)

 

 

 

 

 

Financing activities

 

 

 

Proceeds from issuance of debt

        996,031

 

               -   

Payments of long-term debt

         (19,611)

 

      (109,596)

Deferred financing fees

           (7,287)

 

               -   

Treasury stock purchases

       (747,915)

 

   (1,628,416)

Excess tax benefits from share-based compensation

            6,151

 

         25,707

Proceeds from stock option exercises

          97,412

 

         94,594

 

 

 

 

 

Net cash provided by (used in) financing activities

        324,781

 

   (1,617,711)

 

 

 

 

 

Net increase (decrease) in cash

           (8,627)

 

         62,331

Cash at beginning of period

        189,170

 

       126,839

 

 

 

 

 

Cash at end of period

 $     180,543

 

 $    189,170

 

 

 

 

 

 

 

 

 

 




Kohl's Corporation

Consolidated Balance Sheets

(In Thousands)

Subject to Reclassification


 

 

 

February 2,

 

February 3,

 

 

 

2008

 

2007

 

 

 

 

 

 

Assets

 

 

 

Current assets:

 

 

 

 

Cash

 $     180,543

 

 $     189,170

 

Short-term investments

       483,128

 

       431,230

 

Merchandise inventories

     2,855,733

 

     2,578,378

 

Deferred income taxes

         71,069

 

         40,190

 

Other current assets

       133,416

 

       154,919

 

 

 

 

 

 

 

 

Total current assets

     3,723,889

 

     3,393,887

 

 

 

 

 

 

Property and equipment, net

     6,509,819

 

     5,352,974

Favorable lease rights, net

       209,958

 

       219,286

Goodwill

           9,338

 

           9,338

Other assets

       107,078

 

         58,539

 

 

 

 

 

 

 

 

Total assets

 $10,560,082

 

 $  9,034,024

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Shareholders' Equity

 

 

 

Current liabilities:

 

 

 

 

Accounts payable

 $     835,985

 

 $     934,376

 

Accrued liabilities

       798,508

 

       725,025

 

Income taxes payable

       124,254

 

       233,263

 

Current portion of long-term debt and capital leases

         12,701

 

         18,841

 

 

 

 

 

 

 

 

Total current liabilities

     1,771,448

 

     1,911,505

 

 

 

 

 

 

Long-term debt and capital leases

     2,051,875

 

     1,040,057

Deferred income taxes

       262,451

 

       243,530

Other long-term liabilities

       372,705

 

       235,537

Shareholders' equity

     6,101,603

 

     5,603,395

 

 

 

 

 

 

 

 

Total liabilities and shareholders' equity

 $10,560,082

 

 $  9,034,024