Kohl's Corporation Reports Third Quarter Financial Results
Kohl's Corporation (NYSE: KSS). Kohl's Corporation today reported results for the fiscal periods ended October 27, 2012.
Kohl's Corporation reported third quarter diluted earnings per share increased 14% to $0.91 per diluted share. Net income was $215 million compared to $211 million ($0.80 per diluted share) a year ago. Net sales were $4.5 billion, an increase of 2.6% for the quarter. Comparable store sales for the quarter increased 1.1%.
Year to date, net income was $609 million ($2.54 per diluted share) compared to $711 million ($2.56 per diluted share) a year ago. Net sales were $12.9 billion, an increase of 1.2%. Year-to-date comparable store sales decreased 0.5%.
Kevin Mansell, Kohl's chairman, president and chief executive officer, said, “Our sales performance in the third quarter was consistent with our expectations, while our gross margin results were better than expected. Thanks to our dedicated teams, expenses were again well-managed. We have made noticeable investments in Holiday inventory - both in depth and content - and the in-store experience. Our stores are festive and fun to shop. We are also very excited about our expanded gift strategy and our ability to offer great products at great values."
On November 7, 2012, Kohl's Board of Directors declared a quarterly cash dividend on the Company's common stock of $0.32 per share. The dividend is payable December 26, 2012 to shareholders of record at the close of business on December 5, 2012.
Kohl's Board of Directors also increased the Company's share repurchase authorization under its existing share repurchase program by $3.2 billion, to $3.5 billion. The Company expects to repurchase shares in open market transactions, subject to market conditions, over the next three years.
Kohl's ended the quarter with 1,146 stores in 49 states, compared with 1,127 stores at the same time last year. During the year, the Company opened 21 new stores, including 1 relocated store, closed 1 store and completed 50 remodels.
The Company provided initial guidance for the fiscal quarter ending February 2, 2013 of $2.00 to $2.08 per diluted share. The guidance is based on total sales growth of 7 to 8 percent and comparable store sales growth of 3 to 4 percent and includes expected fourth quarter share repurchases of $300 million. After incorporating its third quarter results and fourth quarter outlook, the Company now expects to earn $4.52 to $4.60 per diluted share for fiscal 2012 versus its previous guidance of $4.50 to $4.65 per diluted share.
Third Quarter 2012 Earnings Conference Call
Kohl's will host its quarterly earnings conference call at 8:30 am ET on November 8, 2012. The phone number for the conference call is (706) 902-0486 and the conference ID is 15140640. Replays of the call will be available for 30 days by dialing (855) 859-2056 or (404) 537-3406 and referencing Conference ID 15140640. The conference call is also accessible via the Company's web site at http://www.kohlscorporation.com/InvestorRelations/event-calendar.htm.
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 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.
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. With a commitment to environmental leadership, Kohl's operates 1,146 stores in 49 states. In support of the communities it serves, Kohl's has raised more than $208 million for children's initiatives nationwide through its Kohl's Cares® cause merchandise program, which operates under Kohl's Cares, LLC, a wholly-owned subsidiary of Kohl's Department Stores, Inc. For a list of store locations and information, or for the added convenience of shopping online, visit www.Kohls.com, or join the discussion on Facebook http://www.facebook.com/kohls or Twitter http://twitter.com/Kohls.
|CONDENSED CONSOLIDATED STATEMENTS OF INCOME|
|(In Millions, except per share data)|
|Subject to Reclassification|
|Three Months||Nine Months|
|Oct 27,||Oct 29,||Oct 27,||Oct 29,|
|Cost of merchandise sold||2,778||2,688||8,059||7,784|
|Selling, general, and administrative||1,077||1,071||3,055||3,066|
|Depreciation and amortization||210||202||620||583|
|Interest expense, net||80||75||243||223|
|Income before income taxes||345||340||960||1,130|
|Provision for income taxes||130||129||351||419|
|Basic net income per share||$||0.92||$||0.80||$||2.56||$||2.58|
|Average number of shares||233||264||238||276|
|Diluted net income per share||$||0.91||$||0.80||$||2.54||$||2.56|
|Average number of shares||235||265||240||278|
|As a percent of net sales:|
|Selling, general and|
|CONDENSED CONSOLIDATED BALANCE SHEETS|
|Subject to Reclassification|
|Oct 27,||Oct 29,|
|Cash and cash equivalents||$||550||$||760|
|Income tax receivable||—||105|
|Deferred income taxes||124||128|
|Total current assets||5,773||5,380|
|Property and equipment, net||9,009||8,918|
Liabilities and Shareholders' Equity
|Income taxes payable||48||—|
|Current portion of capital lease|
|and financing obligations||100||95|
|Total current liabilities||3,671||3,200|
|Capital lease and financing obligations||1,986||2,003|
|Deferred income taxes||395||445|
|Other long-term liabilities||478||459|
|Total liabilities and shareholders' equity||$||15,128||$||14,719|
|CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS|
|Subject to Reclassification|
|Nine Months Ended|
|Oct 27,||Oct 29,|
|Adjustments to reconcile net income to net cash|
|provided by operating activities:|
|Depreciation and amortization||620||583|
|Excess tax benefits from share-based compensation||(3||)||(2||)|
|Deferred income taxes||(46||)||146|
|Other non-cash revenues and expenses||26||19|
|Changes in operating assets and liabilities:|
|Other current and long-term assets||30||(1||)|
|Accrued and other long-term liabilities||(62||)||(16||)|
|Net cash provided by operating activities||703||1,096|
|Acquisition of property and equipment||(641||)||(755||)|
|Sales of investments in auction rate securities||68||143|
|Net cash used in investing activities||(568||)||(632||)|
|Treasury stock purchases||(883||)||(1,956||)|
|Proceeds from issuance of debt||350||646|
|Deferred financing costs||(3||)||(8||)|
|Long-term debt payments||—||(400||)|
|Interest rate hedge payments||—||(48||)|
|Proceeds from financing obligations||7||12|
|Capital lease and financing obligation payments||(87||)||(69||)|
|Proceeds from stock option exercises||50||47|
|Excess tax benefits from share-based compensation||3||2|
|Net cash used in financing activities||(790||)||(1,981||)|
|Net decrease in cash and cash equivalents||(655||)||(1,517||)|
|Cash and cash equivalents at beginning of period||1,205||2,277|
|Cash and cash equivalents at end of period||$||550||$||760|
Wes McDonald, Senior Executive Vice President and Chief Financial Officer
Vicki Shamion, Senior Vice President - Public Relations