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Press release content from Business Wire. The AP news staff was not involved in its creation.

Kohl’s Corporation Reports Financial Results

November 19, 2019

MENOMONEE FALLS, Wis.--(BUSINESS WIRE)--Nov 19, 2019--

Kohl’s Corporation (NYSE:KSS) today reported results for the quarter ended November 2, 2019.

 

Three Months

 

Nine Months

 

($ in millions, except per share data)

 

2019

 

2018

 

Change

 

 

2019

 

2018

 

Change

 

Total revenue

$

4,625

 

$

4,628

 

 

(0.1

)%

$

13,142

 

$

13,406

 

 

(2.0

)%

Comparable sales

 

0.4

%

 

2.5

%

 

 

 

 

(1.9

)%

 

2.1

%

 

 

 

Gross margin

 

36.3

%

 

37.0

%

(67) bps

 

 

37.3

%

 

37.8

%

(51) bps

 

Selling, general, and administrative expenses

$

1,419

 

$

1,375

 

 

3.2

%

$

3,962

 

$

3,907

 

 

1.4

%

Reported

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

$

123

 

$

161

 

 

(24

)%

$

426

 

$

529

 

 

(19

)%

Diluted earnings per share

$

0.78

 

$

0.98

 

 

(20

)%

$

2.67

 

$

3.19

 

 

(16

)%

Non-GAAP (1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

$

116

 

$

161

 

 

(28

)%

$

460

 

$

561

 

 

(18

)%

Diluted earnings per share

$

0.74

 

$

0.98

 

 

(24

)%

$

2.89

 

$

3.38

 

 

(14

)%

(1) Excludes Impairments, store closing and other costs, and (Gain) loss on extinguishment of debt.

Michelle Gass, Kohl’s chief executive officer, said, “We are pleased to report that our business returned to growth during the third quarter, with a comparable sales increase of 0.4%. The quarter started off positive in August with another successful back-to-school season and ended strong in October. We enter the holiday period with momentum and are strategically increasing our investments to take advantage of the unique opportunity to fuel growth and customer acquisition. We believe that investing in the short-term will support our strategies to drive profitable growth over the long-term.”

Dividend

On November 13, 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 December 24, 2019 to shareholders of record at the close of business on December 11, 2019.

Guidance

The Company now expects adjusted annual earnings per diluted share to be $4.75 to $4.95, which excludes $0.22 per diluted share related to the extinguishment of debt and impairments, store closing and other costs recognized in the first nine months of 2019, compared to its prior guidance of $5.15 to $5.45.

Third Quarter 2019 Earnings Conference Call

Kohl’s will host its quarterly earnings conference call at 9:00 am ET on November 19, 2019. The phone number for the conference call is (800) 398-9397. Replays of the call will be available for 30 days by dialing (800) 475-6701. The conference ID is 468137. 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

 

Nine Months Ended

 

(Dollars in Millions, Except per Share Data)

November 2,

2019

November 3,

2018

November 2,

2019

November 3,

2018

Net sales

$

4,358

 

$

4,369

 

$

12,348

 

$

12,632

 

Other revenue

 

267

 

 

259

 

 

794

 

 

774

 

Total revenue

 

4,625

 

 

4,628

 

 

13,142

 

 

13,406

 

Cost of merchandise sold

 

2,775

 

 

2,752

 

 

7,740

 

 

7,854

 

Gross margin rate

 

36.3

%

 

37.0

%

 

37.3

%

 

37.8

%

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general, and administrative

 

1,419

 

 

1,375

 

 

3,962

 

 

3,907

 

As a percent of total revenue

 

30.7

%

 

29.7

%

 

30.1

%

 

29.1

%

Depreciation and amortization

 

227

 

 

243

 

 

687

 

 

725

 

Impairments, store closing and other costs

 

-

 

 

-

 

 

55

 

 

-

 

Operating income

 

204

 

 

258

 

 

698

 

 

920

 

Interest expense, net

 

52

 

 

63

 

 

157

 

 

197

 

(Gain) loss on extinguishment of debt

 

(9

)

 

-

 

 

(9

)

 

42

 

Income before income taxes

 

161

 

 

195

 

 

550

 

 

681

 

Provision for income taxes

 

38

 

 

34

 

 

124

 

 

152

 

Net income

$

123

 

$

161

 

$

426

 

$

529

 

Average number of shares:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

156

 

 

164

 

 

158

 

 

165

 

Diluted

 

157

 

 

165

 

 

159

 

 

166

 

Earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

$

0.79

 

$

0.98

 

$

2.69

 

$

3.21

 

Diluted

$

0.78

 

$

0.98

 

$

2.67

 

$

3.19

 

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

(Unaudited)

 

Three Months Ended

 

Nine Months Ended

 

(Dollars in Millions, Except per Share Data)

November 2,

2019

November 3,

2018

November 2,

2019

November 3,

2018

Net income

 

 

 

 

 

 

 

 

 

 

 

 

GAAP

$

123

 

$

161

 

$

426

 

$

529

 

Impairments, store closing and other costs

 

-

 

 

-

 

 

41

 

 

-

 

(Gain) loss on extinguishment of debt

 

(7

)

 

-

 

 

(7

)

 

32

 

Adjusted (non-GAAP)

$

116

 

$

161

 

$

460

 

$

561

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share

 

 

 

 

 

 

 

 

 

 

 

 

GAAP

$

0.78

 

$

0.98

 

$

2.67

 

$

3.19

 

Impairments, store closing and other costs

 

-

 

 

-

 

 

0.26

 

 

-

 

(Gain) loss on extinguishment of debt

 

(0.04

)

 

-

 

 

(0.04

)

 

0.19

 

Adjusted (non-GAAP)

$

0.74

 

$

0.98

 

$

2.89

 

$

3.38

 

KOHL’S CORPORATION

CONSOLIDATED BALANCE SHEETS

(Unaudited)

(Dollars in Millions)

November 2,

2019

November 3,

2018

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

$

490

 

$

1,047

 

Merchandise inventories

 

4,887

 

 

4,844

 

Other

 

404

 

 

446

 

Total current assets

 

5,781

 

 

6,337

 

Property and equipment, net

 

7,364

 

 

7,538

 

Operating leases

 

2,427

 

 

-

 

Other assets

 

167

 

 

243

 

Total assets

$

15,739

 

$

14,118

 

Liabilities and Shareholders' Equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

$

2,454

 

$

2,583

 

Accrued liabilities

 

1,347

 

 

1,289

 

Income taxes payable

 

2

 

 

14

 

Current portion of:

 

 

 

 

 

 

Finance leases and financing obligations

 

110

 

 

121

 

Operating leases

 

162

 

 

-

 

Total current liabilities

 

4,075

 

 

4,007

 

Long-term debt

 

1,856

 

 

2,272

 

Finance leases and financing obligations

 

1,332

 

 

1,528

 

Operating leases

 

2,643

 

 

-

 

Deferred income taxes

 

258

 

 

201

 

Other long-term liabilities

 

220

 

 

657

 

Shareholders' equity

 

5,355

 

 

5,453

 

Total liabilities and shareholders' equity

$

15,739

 

$

14,118

 

KOHL’S CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

Nine Months Ended

(Dollars in Millions)

November 2,

2019

November 3,

2018

Operating activities

 

 

 

 

 

 

Net income

$

426

 

$

529

 

Adjustments to reconcile net income to net cash provided

by operating activities:

 

 

 

 

 

 

Depreciation and amortization

 

687

 

 

725

 

Share-based compensation

 

47

 

 

71

 

Deferred income taxes

 

45

 

 

(13

)

Impairments, store closing and other costs

 

45

 

 

-

 

(Gain) loss on extinguishment of debt

 

(9

)

 

42

 

Non-cash lease expense

 

112

 

 

-

 

Other non-cash (income) expenses

 

(3

)

 

15

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

Merchandise inventories

 

(1,405

)

 

(1,293

)

Other current and long-term assets

 

34

 

 

70

 

Accounts payable

 

1,266

 

 

1,312

 

Accrued and other long-term liabilities

 

(26

)

 

38

 

Income taxes

 

(49

)

 

(73

)

Operating lease liabilities

 

(125

)

 

-

 

Net cash provided by operating activities

 

1,045

 

 

1,423

 

 

 

 

 

 

 

 

Investing activities

 

 

 

 

 

 

Acquisition of property and equipment

 

(678

)

 

(458

)

Other

 

8

 

 

6

 

Net cash used in investing activities

 

(670

)

 

(452

)

 

 

 

 

 

 

 

Financing activities

 

 

 

 

 

 

Treasury stock purchases

 

(387

)

 

(275

)

Shares withheld for taxes on vested restricted shares

 

(32

)

 

(29

)

Dividends paid

 

(319

)

 

(301

)

Reduction of long-term borrowings

 

(6

)

 

(530

)

Premium paid on redemption of debt

 

-

 

 

(35

)

Finance lease and financing obligation payments

 

(88

)

 

(95

)

Proceeds from financing obligations

 

11

 

 

-

 

Proceeds from stock option exercises

 

2

 

 

33

 

Net cash used in financing activities

 

(819

)

 

(1,232

)

Net decrease in cash and cash equivalents

 

(444

)

 

(261

)

Cash at beginning of period

 

934

 

 

1,308

 

Cash at end of period

$

490

 

$

1,047

 

 

View source version on businesswire.com:https://www.businesswire.com/news/home/20191119005195/en/

CONTACT: Investor Relations:

Mark Rupe, (262) 703-1266,mark.rupe@kohls.comMedia:

Jen Johnson, (262) 703-5241,jen.johnson@kohls.com

KEYWORD: UNITED STATES NORTH AMERICA WISCONSIN

INDUSTRY KEYWORD: WOMEN DEPARTMENT STORES MEN HOME GOODS FAMILY FASHION CONSUMER COSMETICS RETAIL ONLINE RETAIL

SOURCE: Kohl’s Corporation

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