EX-99.1 2 exh991.htm PRESS RELEASE

Exhibit 99.1


National & Retail Trades and First Call, Release: February 26, 2009 at 4:00 PM (EST)


KOHL'S CORPORATION REPORTS FINANCIAL RESULTS

FOR FISCAL YEAR AND FOURTH QUARTER


·

Q4 Reported EPS of $1.10 and Fiscal 2008 of $2.89, Exceeding First Call
Consensus Estimate


·

Full Year Free Cash Flow of $687 Million


MENOMONEE FALLS, WI … February 26/BUSINESS WIRE/Kohl’s Corporation (NYSE:KSS). Kohl’s Corporation today reported results for the quarter and year ended January 31, 2009.


Kohl’s Corporation reported net income for the quarter ended January 31, 2009 of $336 million, or $1.10 per diluted share, compared with $412 million, or $1.31 per diluted share, a year ago.  Net sales were $5.2 billion, a decrease of 4.6 percent for the quarter.  Comparable store sales for the quarter decreased 9.1 percent.


For the twelve months ended January 31, 2009, net income was $885 million, or $2.89 per diluted share, compared to $1,084 million, or $3.39 per diluted share, for the twelve months ended February 2, 2008. Net sales decreased 0.5 percent to $16.4 billion from $16.5 billion a year ago. Comparable store sales decreased 6.9 percent for the same period.

Kevin Mansell, Kohl’s president and CEO, said, “Despite the sales results, we delivered improved merchandise margins through strong inventory management and successful exclusive brand strategies. We also managed expenses well while improving our store experience. I am very proud of our 126,000 associates and the role they played in these results and want to thank them for their hard work, loyalty and dedication in delivering on our promise to " expect great things" from Kohl’s."

Mansell added, “We expect 2009 to be just as challenging from a macro-economic perspective.  We are planning conservatively in our sales expectations, inventory levels and expenses.  We will be very competitive in order to gain market share in this environment.  We will continue to invest prudently in stores, both new and remodeled, technology and talent to ensure our profitable growth in the long run.”  


Expansion Update

During 2008, Kohl’s successfully opened 75 stores.  The Company ended the year with 1,004 stores in 48 states, compared with 929 stores in 47 states at the same time last year.  In fiscal 2009, the Company expects to open approximately 55 stores and remodel 51 stores.  

Free Cash Flow

Free cash flow is a non-GAAP financial measure which the Company defines as net cash provided by operating activities less capital expenditures.   Free cash flow should be evaluated in addition to, and not considered a substitute for, other financial measures such as net income and cash flow provided by operations.  The Company believes that free cash flow represents its ability to generate additional cash flow from its business operations.  




The following table reconciles net cash provided by operating activities, a GAAP measure, to free cash flow, a non-GAAP measure, for the year ended January 31, 2009.


 

(in Millions)

 

 

Net cash provided by operating activities

$ 1,701

 

Acquisition of property & equipment and favorable lease rights

(1,014)

 

Free cash flow

$  687  


Earnings Guidance

The Company issued its initial guidance for fiscal 2009.  Based on assumptions of a total sales decrease of 1% to 4% and a comparable store sales decrease of 5% to 8%, the Company expects earnings per diluted share of $2.00 to $2.30 for the year.  For the first fiscal quarter, the Company expects earnings per diluted share of $0.27 to $0.34 based on an assumption of a  comparable store sales decrease of 5% to 8%.


Fourth Quarter Earnings Release

A conference call is scheduled to discuss this fourth quarter earnings release at 5:00 PM (EST).  Investors will have the opportunity to listen to the conference call by dialing (706) 902-0486, using Conference ID 82646090, ten minutes prior to the start of the call.  A replay of the call will also be accessible from 6 PM EST February 26 through March 26, 2009. To listen to the replay, dial (706) 645-9291, and use Conference ID 82646090.


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=irol-eventDetails&c= 60706&eventID=2079421 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

 

January 31,

% to
Net

 

February 2,

% to
Net

 

2009

Sales

 

2008

Sales

 

 

 

 

 

 

Net sales

 $     5,235

 

 

 $     5,487

 

Cost of merchandise sold

        3,413

65.2%

 

        3,605

65.7%

 

 

 

 

 

 

Gross margin

        1,822

34.8%

 

        1,882

34.3%

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

Selling, general, and administrative

        1,102

21.1%

 

        1,067

19.4%

Depreciation and amortization

           143

2.7%

 

           126

2.3%

Preopening expenses

              4

0.1%

 

              5

0.1%

 

 

 

 

 

 

Operating income

           573

10.9%

 

     684

12.5%

 

 

 

 

 

 

Interest expense, net

             30

0.5%

 

             23

0.5%

 

 

 

 

 

 

Income before income taxes

           543

10.4%

 

           661

12.0%

Provision for income taxes

           207

4.0%

 

           249

4.5%

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 $        336

6.4%

 

 $        412

7.5%

 

 

 

 

 

 

 

 

 

 

 

 

Basic net income per share

 $       1.10

 

 

 $       1.32

 

Average number of  shares

           305

 

 

           313

 

 

 

 

 

 

 

Diluted net income per share

 $       1.10

 

 

 $       1.31

 

Average number of  shares

           305

 

 

           314

 

 

 

 

 

 

 

 

 

 

 

 

 





Kohl's Corporation

Condensed Consolidated Statements of Income

(In Millions, except per share data)

(Unaudited)

Subject to Reclassification


 

Twelve Months

 

(52 Weeks) Ended

 

 

% to

 

 

% to

 

January 31,

Net

 

February 2,

Net

 

2009

Sales

 

2008

Sales

 

 

 

 

 

 

Net sales

 $    16,389

 

 

 $    16,474

 

Cost of merchandise sold

      10,334

63.1%

 

      10,460

63.5%

 

 

 

 

 

 

Gross margin

        6,055

36.9%

 

        6,014

36.5%

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

Selling, general, and administrative

        3,936

24.0%

 

        3,697

22.4%

Depreciation and amortization

           541

3.3%

 

           452

2.7%

Preopening expenses

             42

0.2%

 

             61

0.4%

 

 

 

 

 

 

Operating income

        1,536

9.4%

 

        1,804

11.0%

 

 

 

 

 

 

Interest expense, net

           111

0.7%

 

             62

0.4%

 

 

 

 

 

 

Income before income taxes

        1,425

8.7%

 

        1,742

10.6%

Provision for income taxes

           540

3.3%

 

           658

4.0%

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 $        885

5.4%

 

 $     1,084

6.6%

 

 

 

 

 

 

 

 

 

 

 

 

Basic net income per share

 $       2.89

 

 

 $       3.41

 

Average number of  shares

           306

 

 

           318

 

 

 

 

 

 

 

Diluted net income per share

 $       2.89

 

 

 $       3.39

 

Average number of  shares

           307

 

 

           320

 





Kohl's Corporation

Condensed Consolidated Balance Sheets

(In Millions)

(Unaudited)

Subject to Reclassification


 

January 31,

 

February 2,

 

2009

 

2008

 

 

 

 

Assets

 

 

 

Current assets:

 

 

 

Cash

 $       167

 

 $       181

Short-term investments

          509

 

          483

Merchandise inventories

       2,799

 

       2,856

Deferred income taxes

           74

 

           71

Other current assets

          151

 

          133

 

 

 

 

Total current assets

       3,700

 

       3,724

 

 

 

 

Property and equipment, net

       6,984

 

       6,510

Long-term investments

          332

 

            -   

Favorable lease rights, net

          201

 

          210

Goodwill

             9

 

             9

Other assets

          108

 

          107

 

 

 

 

Total assets

 $  11,334

 

 $  10,560

 

 

 

 

 

 

 

 

Liabilities and Shareholders' Equity

 

 

 

Current liabilities:

 

 

 

Accounts payable

 $       881

 

 $       836

Accrued liabilities

          812

 

          798

Income taxes payable

          105

 

          124

Current portion of long-term debt and capital leases

           17

 

           13

 

 

 

 

Total current liabilities

       1,815

 

       1,771

 

 

 

 

Long-term debt and capital leases

       2,053

 

       2,052

Deferred income taxes

          320

 

          262

Other long-term liabilities

          407

 

          373

Shareholders' equity

       6,739

 

       6,102

 

 

 

 

Total liabilities and shareholders' equity

 $  11,334

 

 $  10,560

 

 

 

 

 

 

 

 





Kohl's Corporation

Condensed Consolidated Statements of Cash Flows

(In Millions)

(Unaudited)

Subject to Reclassification


 

2008

 

2007

 

 

 

 

Operating activities

 

 

 

Net income

 $   885

 

 $1,084

Adjustments to reconcile net income to net cash

 

 

 

  provided by operating activities:

 

 

 

Depreciation and amortization, including debt discount

      543

 

      453

Share-based compensation

        55

 

        54

Excess tax benefits from share-based compensation

        -   

 

        (6)

Deferred income taxes

        84

 

       (12)

Other non-cash revenues and expenses

        47

 

        34

Changes in operating assets and liabilities:

 

 

 

Merchandise inventories

        60

 

     (275)

Other current and long-term assets

       (23)

 

       (44)

Accounts payable

        48

 

       (98)

Accrued and other long-term liabilities

        28

 

      149

Income taxes

       (26)

 

     (103)

 

 

 

 

Net cash provided by operating activities

   1,701

 

   1,236

 

 

 

 

Investing activities

 

 

 

Acquisition of property and equipment

 

 

 

  and favorable lease rights

  (1,014)

 

  (1,542)

Net purchases of money-market investments

     (479)

 

       (30)

Purchases of investments in auction rate securities

       (53)

 

  (6,521)

Sales of investments in auction rate securities

        93

 

   6,499

Proceeds from sale of property, plant and equipment

         1

 

        30

Other

        10

 

        (4)

 

 

 

 

Net cash used in investing activities

  (1,442)

 

  (1,568)

 

 

 

 

Financing activities

 

 

 

Treasury stock purchases

     (262)

 

     (748)

Payments of capital leases

       (16)

 

       (20)

Proceeds from issuance of debt,

 

 

 

  net of deferred financing fees

        -   

 

      989

Proceeds from stock option exercises

         5

 

        97

Excess tax benefits from share-based compensation

        -   

 

         6

 

 

 

 

Net cash (used in) provided by financing activities

     (273)

 

      324

 

 

 

 

Net decrease in cash

       (14)

 

        (8)

Cash at beginning of year

      181

 

      189

 

 

 

 

Cash at end of year

 $   167

 

 $   181