Market Overview

Kohl's Corporation Reports Financial Results

Share:
  • Comparable sales decrease 3.4%
  • Diluted earnings per share of $0.38
  • Adjusted diluted earnings per share(1) of $0.61

Kohl's Corporation (NYSE:KSS) today reported results for the quarter
ended May 4, 2019.

      Three Months
($ in millions, except per share data)      

2019

  2018   Change
Total revenue $ 4,087   $ 4,208     (2.9 )%
Comparable sales (3.4 )% 3.6 %
Gross margin 36.8 % 36.9 % (6) bps
Selling, general, and administrative expenses $ 1,275 $ 1,259 1.2 %
Reported
Net income $ 62 $ 75 (17 )%
Diluted earnings per share $ 0.38 $ 0.45 (16 )%
Non-GAAP(1)
Net income $ 98 $ 107 (8 )%
Diluted earnings per share       $ 0.61     $ 0.64       (5 )%

(1) Excludes Impairments, store closing and other costs
in 2019 and Loss on extinguishment of debt in 2018.

 

Michelle Gass, Kohl's chief executive officer, said, "The year has
started off slower than we'd like, with our first quarter sales coming
in below our expectation. We are actively addressing the opportunities
that impacted our first quarter sales and we have strong initiatives
that will enhance our sales performance in the second half. We are
incredibly excited about our nationwide rollout of the Amazon returns
program as well as several important brand launches and program
expansions. Operationally, the team reacted appropriately throughout the
quarter by managing expenses in line with our expectations. While we are
planning the year more conservatively, we continue to invest in our
business and operate with a view on our long-term success."

Dividend

On May 15, 2019, Kohl's Board of Directors declared a quarterly cash
dividend on the Company's common stock of $0.67 per share. The dividend
is payable June 26, 2019 to shareholders of record at the close of
business on June 12, 2019.

Guidance Update

The Company now expects adjusted annual earnings per diluted share to be
$5.15 to $5.45, compared to its prior guidance of $5.80 to $6.15.

First Quarter 2019 Earnings Conference Call

Kohl's will host its quarterly earnings conference call at 9:00 am ET on
May 21, 2019. The phone number for the conference call is (800)
230-1085. Replays of the call will be available for 30 days by dialing
(800) 475-6701. The conference ID is 465049. The conference call and
replays are also accessible via the Company's web site at http://corporate.kohls.com/investors/events-and-presentations.

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 2019 earnings guidance. 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.
Forward-looking statements relate to the date initially made, and Kohl's
undertakes no obligation to update them.

About Kohl's

Kohl's (NYSE:KSS) is a leading omnichannel retailer with more than
1,100 stores in 49 states. With a commitment to inspiring and empowering
families to lead fulfilled lives, Kohl's offers amazing national and
exclusive brands, incredible savings and an easy shopping experience in
our stores, online at Kohls.com
and on Kohl's mobile app. Since its founding, Kohl's has given more than
$700 million to support communities nationwide, with a focus on family
health and wellness. For a list of store locations or to shop online,
visit Kohls.com.
For more information about Kohl's impact in the community or how to join
our winning team, visit Corporate.Kohls.com
or follow @KohlsNews on Twitter.

     
 

KOHL'S CORPORATION

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

 
 
Three Months Ended
(Dollars in Millions, Except per Share Data)       May 4,

2019

  May 5,

2018

Net sales $ 3,821   $ 3,953
Other revenue         266       255  
Total revenue 4,087 4,208
Cost of merchandise sold 2,415 2,496
Gross margin rate 36.8 % 36.9 %
Operating expenses:
Selling, general, and administrative 1,275 1,259
As a percent of total revenue 31.2 % 29.9 %
Depreciation and amortization 230 243
Impairments, store closing and other costs         49       -  
Operating income 118 210
Interest expense, net 52 71
Loss on extinguishment of debt               42  
Income before income taxes 66 97
Provision for income taxes         4       22  
Net income       $ 62     $ 75  
Average number of shares:
Basic 161 165
Diluted 162 167
Earnings per share:
Basic $ 0.38 $ 0.46
Diluted       $ 0.38     $ 0.45  
     
 

ADJUSTED NET INCOME AND DILUTED EARNINGS PER SHARE, NON-GAAP
FINANCIAL MEASURES

(Unaudited)

 
 
Three Months Ended
(Dollars in Millions, Except per Share Data)       May 4,

2019

  May 5,

2018

Net income  
GAAP $ 62 $ 75
Impairments, store closing and other costs 36 -
Loss on extinguishment of debt         -       32
Adjusted (non-GAAP)       $ 98     $ 107
 
Diluted earnings per share
GAAP $ 0.38 $ 0.45
Impairments, store closing and other costs 0.23 -
Loss on extinguishment of debt         -       0.19
Adjusted (non-GAAP)       $ 0.61     $ 0.64
     
 

KOHL'S CORPORATION

CONSOLIDATED BALANCE SHEETS

(Unaudited)

 
 
Three Months Ended
(Dollars in Millions)       May 4,

2019

    May 5,

2018

Assets    
Current assets:
Cash and cash equivalents $ 543 $ 822
Merchandise inventories 3,680 3,726
Other         412       435
Total current assets 4,635 4,983
Property and equipment, net 7,211 7,694
Operating leases 2,453 -
Other assets         167       239
Total assets       $ 14,466     $ 12,916
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable $ 1,295 $ 1,454
Accrued liabilities 1,184 1,135
Income taxes payable 40 118
Current portion of:
Finance leases and financing obligations 115 123
Operating leases         158       -
Total current liabilities 2,792 2,830
Long-term debt 1,855 2,301
Finance leases and financing obligations 1,225 1,563
Operating leases 2,680 -
Deferred income taxes 233 198
Other long-term liabilities 239 668
Shareholders' equity         5,442       5,356
Total liabilities and shareholders' equity       $ 14,466     $ 12,916
     
 

KOHL'S CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 
 
Three Months Ended
(Dollars in Millions)       May 4,

2019

  May 5,

2018

Operating activities  
Net income $ 62 $ 75
Adjustments to reconcile net income to net cash provided

by operating activities:

Depreciation and amortization 230 243
Share-based compensation 15 30
Deferred income taxes 18 (12 )
Impairments, store closing and other costs 49
Loss on extinguishment of debt 42
Non-cash operating lease expense 37
Other non-cash expenses 2 2
Changes in operating assets and liabilities:
Merchandise inventories (202 ) (181 )
Other current and long-term assets 6 68
Accounts payable 108 183
Accrued and other long-term liabilities (141 ) (107 )
Income taxes 1 44
Operating lease liabilities         (49 )      
Net cash provided by operating activities         136       387  
 
Investing activities
Acquisition of property and equipment         (238 )     (133 )
Net cash used in investing activities         (238 )     (133 )
 
Financing activities
Treasury stock purchases (121 ) (70 )
Shares withheld for taxes on vested restricted shares (25 ) (17 )
Dividends paid (108 ) (101 )
Reduction of long-term borrowings (6 ) (500 )
Premium paid on redemption of debt (35 )
Finance lease and financing obligation payments (31 ) (33 )
Proceeds from stock option exercises         2       16  
Net cash used in financing activities         (289 )     (740 )
Net decrease in cash and cash equivalents (391 ) (486 )
Cash at beginning of period         934       1,308  
Cash at end of period       $ 543     $ 822  

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