Kohl's Corporation Reports Second Quarter Financial Results

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Kohl's Corporation Reports Second Quarter Financial Results

MENOMONEE FALLS, Wis.--(BUSINESS WIRE)-- Kohl's Corporation (NYS: KSS) . Kohl's Corporation today reported results for the quarter and year-to-date period ended August 3, 2013.

            
 Quarter Year to Date
($ in millions) 2013  2012  Change 2013  2012  Change
Sales$4,289 $4,205 2.0%$8,488 $8,447 0.5%
Comparable store sales0.9%(2.7)%-(0.5)%(1.3)%-
Net income$231$240(4)%$378$394(4)%
Diluted earnings per share $1.04  $1.00  4% $1.70  $1.63  4%
 

Kevin Mansell, Kohl's chairman, president and chief executive officer, said, "We are pleased with our progress in the second quarter. Sales improved significantly over the first quarter and our gross margin improved over last year. Expenses were well-managed and we ended the quarter with inventory per store up mid-single digits while funding our E-Commerce growth. I would like to thank each of our associates for their contribution to our results."


Dividend

On August 13, 2013, Kohl's Board of Directors declared a quarterly cash dividend on the Company's common stock of $0.35 per share. The dividend is payable September 25, 2013 to shareholders of record at the close of business on September 11, 2013.

Store Update

Kohl's ended the quarter with 1,155 stores in 49 states, compared with 1,134 stores at the same time last year. The Company opened nine new stores during the first quarter of 2013 and expects to open three new stores and remodel 30 stores in the Fall.

Earnings Guidance

The Company provided initial guidance for the fiscal quarter ending November 2, 2013 of $0.83 to $0.92 per diluted share. The guidance is based on total sales growth of 1 to 3 percent and comparable store sales growth of 0 to 2 percent. The Company also updated its annual earnings per share guidance from $4.15 - $4.45 to $4.15 to $4.35.

Second Quarter 2013 Earnings Conference Call

Kohl's will host a second quarter earnings conference call at 8:30 am ET on August 15, 2013. The phone number for the conference call is (706) 902-0486. Replays of the call will be available for 30 days by dialing (855) 859-2056 or (404) 537-3406. The conference ID for both the live call and the replay is 94952764. The conference call and replays are 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 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 (NYS: 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 1,155 stores in 49 states. In support of the communities it serves, Kohl's has raised more than $231 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, join the discussion on Facebook (http://www.facebook.com/kohls) or Twitter (http://twitter.com/Kohls) or get inspired on Pinterest (http://pinterest.com/kohls/) and Instagram (http://instagram.com/kohls).

 
KOHL'S CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(In Millions, except per share data)
(Unaudited)
    
Three Months EndedSix Months Ended
August 3,July 28,August 3,July 28,
2013201220132012
Net sales$4,289$4,205$8,488$8,447
Cost of merchandise sold2,613 2,563 5,284 5,281 
 
Gross margin1,6761,6423,2043,166
 
Operating expenses:
Selling, general, and administrative1,0009751,9971,977
Depreciation and amortization225 210 439 411 
 
Operating income451457768778
 
Interest expense, net84 80 167 162 
 
Income before income taxes367377601616
Provision for income taxes136 137 223 222 
 
Net income$231 $240 $378 $394 
 
Basic net income per share$1.05$1.01$1.71$1.64
Average number of shares220238221240
 
Diluted net income per share$1.04$1.00$1.70$1.63
Average number of shares222239222242
 
As a percent of net sales:
Gross margin39.1%39.0%37.7%37.5%
Selling, general and
administrative expenses23.3%23.2%23.5%23.4%
Operating income10.5%10.9%9.0%9.2%
Net income5.4%5.7%4.5%4.7%
 
KOHL'S CORPORATION
CONSOLIDATED BALANCE SHEETS
(In Millions)
(Unaudited)
  
August 3,July 28,
20132012

Assets

Current assets:
Cash and cash equivalents$592$600
Merchandise inventories3,8563,521
Deferred income taxes150109
Other284 260
 
Total current assets4,8824,490
 
Property and equipment, net8,8919,010
Long-term investments58102
Other assets266 254
 
Total assets$14,097 $13,856
 

Liabilities and Shareholders' Equity

Current liabilities:
Accounts payable$1,396$1,531
Accrued liabilities1,0651,001
Income taxes payable7524
Current portion of capital lease
and financing obligations147 94
 
Total current liabilities2,6832,650
 
Long-term debt2,4922,141
Capital lease and financing obligations1,9481,997
Deferred income taxes381411
Other long-term liabilities540469
Shareholders' equity6,053 6,188
 
Total liabilities and shareholders' equity$14,097 $13,856
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KOHL'S CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Millions)
(Unaudited)
 
 Six Months Ended
August 3, July 28,
20132012
Operating activities
Net income$378$394
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization439411
Share-based compensation2724
Excess tax benefits from share-based compensation(2)(3)
Deferred income taxes(12)(13)
Other non-cash revenues and expenses188
Changes in operating assets and liabilities:
Merchandise inventories(103)(300)
Other current and long-term assets2240
Accounts payable89298
Accrued and other long-term liabilities(20)(166)
Income taxes(74)(111)
 
Net cash provided by operating activities762 582 
 
Investing activities
Acquisition of property and equipment(284)(429)
Sales of investments in auction rate securities151
Other13 2 
 
Net cash used in investing activities(270)(376)
 
Financing activities
Treasury stock purchases(279)(623)
Dividends paid(153)(153)
Proceeds from financing obligations4
Capital lease and financing obligation payments(52)(61)
Proceeds from stock option exercises4619
Excess tax benefits from share-based compensation23