EX-99.1 2 exh991.htm PRESS RELEASE

Exhibit 99.1


National & Retail Trades and First Call, Release: November 13, 2008 at 4:00 PM (EST)



KOHL'S CORPORATION REPORTS EARNINGS OF

$0.52 PER DILUTED SHARE FOR THIRD QUARTER OF FISCAL 2008


MENOMONEE FALLS, WI … November 13/BUSINESS WIRE/Kohl’s Corporation (NYSE:KSS). Kohl’s Corporation today reported results for the quarter and year-to-date periods ended November 1, 2008.


Kohl’s Corporation reported net income for the quarter ended November 1, 2008 of $160.2 million, or $0.52 per diluted share, compared with $194.0 million, or $0.61 per diluted share, a year ago.  Net sales were $3.8 billion, a decrease of 0.6 percent for the quarter.  Comparable store sales for the quarter decreased 6.7 percent.


For the nine months ended November 1, 2008, net income decreased 18 percent to $549.1 million, or $1.79 per diluted share, compared to $672.2 million, or $2.09 per diluted share, for the nine months ended November 3, 2007. Net sales increased 1.5 percent to $11.2 billion from $11.0 billion a year ago. Comparable store sales decreased 6.0 percent for the same period.

Kevin Mansell, Kohl’s president and CEO, said, “Our third quarter results reflect strong inventory management and increased penetration of private and exclusive brands, resulting in improved gross margins, as well as effective expense control.  We remain conservative in our sales expectations for the fourth quarter and will manage our business accordingly.  We expect the holiday season to be the most challenging in years and will be very competitive in order to gain market share.  We will use our financial strength to continue to invest in technology and talent in building for the future as we expand selectively and remodel existing stores in fiscal 2009.”


Mansell added, “I am very proud of our 120,000 associates and the role they played in delivering these results in this environment 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.”


Expansion Update


During the first nine months of 2008, Kohl’s successfully opened 75 stores.  The Company ended the quarter with 1,004 stores in 48 states, compared with 914 stores in 47 states at the same time last year.  In fiscal 2009, the Company expects to open approximately 50 stores and remodel 60 stores.  

Earnings Guidance


For the fourth quarter, assuming comparable store sales of negative 8 percent to negative 12 percent, the Company would expect earnings per diluted share of $0.90 to $1.05 versus previous guidance of $1.26 to $1.34 per diluted share.  This would result in earnings per diluted share of $2.69 to $2.84 for fiscal 2008.



Third Quarter 2008 Earnings Conference Call


Investors will have an opportunity to listen to the third quarter earnings conference call at 5:00 PM EST on November 13 by dialing (706) 902-0486, using Conference ID 72256663, ten minutes prior to the start of the call.  A replay of the call will also be accessible from 6 PM EST November 13 through December 15, 2008. To listen to the replay, dial (706) 645-9291, and use Conference ID 72256663.


In addition, the call will be web cast live over the Internet through the Company's web site located at http://www.kohlscorporation.com/InvestorRelations/event-calendar.htm. To participate in the conference, register at http://phx.corporate-ir.net/phoenix.zhtml?p=iroleventDetails&c=60706&eventID=1978565 at least ten minutes prior to the call to download and install any necessary audio software.  (Due to its length, this URL may need to be copied/pasted into your Internet browser’s address field.  Remove the extra space if one exists.) 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 - News) 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. Kohl's operates 1,004 stores in 48 states. A company committed to the communities it serves; Kohl’s has raised more than $102 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

Condensed Consolidated Statements of Income

(In Millions, except per share data)

(Unaudited)

Subject to Reclassification

 

 

 

 

 

 

 

Three Months

 

 

 

(13 Weeks) Ended

 

 

 

 

% to

 

 

% to

 

 

 

November 1,

Net

 

November 3,

Net

 

 

 

2008

Sales

 

2007

Sales

 

 

 

 

 

 

 

 

Net sales

 

 $ 3,803.6

 

 

 $ 3,825.2

 

Cost of merchandise sold

 

2,380.8

62.6%

 

  2,407.2

62.9%

 

 

 

 

 

 

 

 

Gross margin

 

1,422.8

37.4%

 

1,418.0

37.1%

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

Selling, general, and administrative

 

  981.5

25.8%

 

  933.7

24.4%

 

Depreciation and amortization

 

135.5

3.6%

 

  115.2

3.0%

 

Preopening expenses

 

20.5

0.5%

 

  38.2

1.1%

 

 

 

 

 

 

 

 

Operating income

 

285.3

7.5%

 

  330.9

8.6%

 

 

 

 

 

 

 

 

Interest expense, net

 

   28.2

0.7%

 

  18.7

0.4%

 

 

 

 

 

 

 

 

Income before income taxes

 

  257.1

6.8%

 

  312.2

8.2%

Provision for income taxes

 

  96.9

2.6%

 

  118.2

3.1%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

 $   160.2

4.2%

 

 $   194.0

5.1%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic net income per share

 

 $     0.53

 

 

 $     0.61

 

Average number of  shares

 

  304.6

 

 

  316.9

 

 

 

 

 

 

 

 

 

Diluted net income per share

 

 $     0.52

 

 

 $     0.61

 

Average number of  shares

 

305.4

 

 

318.6

 

 

 

 

 

 

 

 

 




Kohl's Corporation

Condensed Consolidated Statements of Income

(In Millions, except per share data)

(Unaudited)

Subject to Reclassification

 

 

 

 

 

 

 

 

 

 

 

Nine Months

 

 

 

(39 Weeks) Ended

 

 

 

 

% to

 

 

% to

 

 

 

November 1,

Net

 

November 3,

Net

 

 

 

2008

Sales

 

2007

Sales

 

 

 

 

 

 

 

 

Net sales

 

 $   11,153.4

 

 

 $   10,986.4

 

Cost of merchandise sold

 

6,920.6

62.0%

 

6,854.1

62.4%

 

 

 

 

 

 

 

 

Gross margin

 

4,232.8

38.0%

 

4,132.3

37.6%

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

Selling, general, and administrative

 

2,834.0

25.4%

 

2,630.0

23.9%

 

Depreciation and amortization

 

  398.1

3.6%

 

326.0

3.0%

 

Preopening expenses

 

  37.4

0.4%

 

55.6

0.5%

 

 

 

 

 

 

 

 

Operating income

 

963.3

8.6%

 

1,120.7

10.2%

 

 

 

 

 

 

 

 

Interest expense, net

 

  81.4

0.7%

 

  39.4

0.4%

 

 

 

 

 

 

 

 

Income before income taxes

 

  881.9

7.9%

 

1,081.3

9.8%

Provision for income taxes

 

  332.8

3.0%

 

409.1

3.7%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

 $    549.1

4.9%

 

 $      672.2

6.1%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic net income per share

 

 $         1.79

 

 

 $        2.10

 

Average number of  shares

 

306.3

 

 

319.7

 

 

 

 

 

 

 

 

 

Diluted net income per share

 

 $         1.79

 

 

 $        2.09

 

Average number of  shares

 

  307.2

 

 

  322.4

 


Kohl's Corporation

Condensed Consolidated Balance Sheets

(In Thousands)

(Unaudited)

Subject to Reclassification

 

 

 

 

 

 

 

November 1,

 

November 3,

 

 

2008

 

2007

 

 

 

 

 

Assets

 

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

 $     242,970

 

 $     294,986

 

Short-term investments

         36,131

 

         25,679

 

Merchandise inventories

     3,712,033

 

     3,908,529

 

Deferred income taxes

         75,841

 

         62,291

 

Other current assets

       150,847

 

        143,743

 

 

 

 

 

 

 

 

Total current assets

     4,217,822

 

     4,435,228

 

 

 

 

 

 

Property and equipment, net

     6,991,337

 

     6,383,580

Long-term investments

       344,888

 

                -   

Favorable lease rights, net

       198,984

 

        213,298

Goodwill

           9,338

 

           9,338

Other assets

       110,041

 

         72,539

 

 

 

 

 

 

 

 

Total assets

 $11,872,410

 

 $11,113,983

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Shareholders' Equity

 

 

 

Current liabilities:

 

 

 

 

Accounts payable

 $  1,644,562

 

 $  1,708,891

 

Accrued liabilities

       754,895

 

        779,168

 

Income taxes payable

              615

 

         62,930

 

Short-term debt

       302,000

 

        170,000

 

Current portion of long-term debt and capital leases

         17,111

 

         11,345

 

 

 

 

 

 

 

 

Total current liabilities

     2,719,183

 

     2,732,334

 

 

 

 

 

 

Long-term debt and capital leases

     2,056,773

 

     2,045,535

Deferred income taxes

       314,298

 

        258,336

Other long-term liabilities

       387,609

 

        268,873

Shareholders' equity

     6,394,547

 

     5,808,905

 

 

 

 

 

 

 

 

Total liabilities and shareholders' equity

 $11,872,410

 

 $11,113,983

 

 

 

 

 

 




Kohl's Corporation

Condensed Consolidated Statements of Cash Flows

(In Thousands)

(Unaudited)

Subject to Reclassification

 

 

 

 

 

39 Weeks Ended

 

 

November 1,

 

November 3,

 

 

2008

 

2007

 

 

 

 

 

Operating activities

 

 

(Revised)

Net income

 $  549,127

 

 $  672,182

Adjustments to reconcile net income to net cash

 

 

 

   provided by operating activities:

 

 

 

 

Depreciation and amortization, including debt discount

399,371

 

326,741

 

Share-based compensation

   39,053

 

38,950

 

Excess tax benefits from share-based compensation

  (127)

 

(6,623)

 

Deferred income taxes

71,142

 

(7,295)

 

Other non-cash revenues and expenses

  17,572

 

26,956

 

Changes in operating assets and liabilities:

 

 

 

 

  Merchandise inventories

       (854,254)

 

 (1,328,662)

 

  Other current and long-term assets

         (23,073)

 

      (19,339)

 

  Accounts payable

        811,163

 

     774,515

 

  Accrued and other long-term liabilities

         (53,645)

 

      (13,427)

 

  Income taxes

       (128,325)

 

    (163,710)

 

 

 

 

 

Net cash provided by operating activities

        828,004

 

     300,288

 

 

 

 

 

Investing activities

 

 

 

Acquisition of property and equipment

 

 

 

 

and favorable lease rights

       (843,030)

 

 (1,258,166)

Purchases of investments in auction rate securities

         (52,800)

 

 (4,686,950)

Sales of investments in auction rate securities

          92,900

 

  5,117,779

Net purchases of money-market investments

           (5,834)

 

      (25,278)

Proceeds from sale of property, plant and equipment

  1,377

 

       30,197

Other

4,592

 

       (4,809)

 

 

 

 

 

Net cash used in investing activities

       (802,795)

 

    (827,227)

 

 

 

 

 

Financing activities

 

 

 

Proceeds from issuance of debt

    -   

 

  996,031

Net borrowings under credit facilities

  302,000

 

170,000

Capital lease payments

           (8,748)

 

 (16,644)

Deferred financing fees

       -   

 

       (7,378)

Treasury stock purchases

       (261,638)

 

(612,475)

Excess tax benefits from share-based compensation

  127

 

6,623

Proceeds from stock option exercises

  5,477

 

96,598

 

 

 

 

 

Net cash provided by financing activities

37,218

 

632,755

 

 

 

 

 

Net increase in cash and cash equivalents

  62,427

 

105,816

Cash and cash equivalents at beginning of period

180,543

 

189,170

 

 

 

 

 

Cash and cash equivalents at end of period

 $   242,970

 

 $  294,986