Kohl's Corporation Reports Fourth Quarter Financial Results

Kohl's Corporation Reports Fourth Quarter Financial Results

MENOMONEE FALLS, Wis.--(BUSINESS WIRE)-- Kohl's Corporation (NYS: KSS) . Kohl's Corporation today reported results for the fiscal periods ended February 2, 2013.

Total Sales

Comparable

($ in millions)

2012

2011

Change(1)

Change(2)

Store Sales(2)

Quarter

$

6,342

$

6,018

5.4%

2.5%

1.9%

Year

$

19,279

$

18,804

2.5%

1.6%

0.3%

(1) Compares the periods ended February 2, 2013 to the periods ended January 28, 2012

(2) Compares the periods ended January 26, 2013 to the periods ended January 28, 2012

Kohl's Corporation reported fourth quarter diluted earnings per share of $1.66 compared to $1.81 for the fourth quarter of 2011. Net income for the fourth quarter was $378 million compared to $455 million a year ago. For the year, net income was $1.0 billion ($4.17 per diluted share) compared to $1.2 billion ($4.30 per diluted share) for fiscal 2011.


Kevin Mansell, Kohl's chairman, president and chief executive officer, said, "Sales for the fourth quarter developed very late and, as a result, came at a cost to profitability. We were, however, able to end the quarter with levels of inventory appropriate for a strong transition to Spring. Our associates across the company did an excellent job in managing expenses throughout the year."

Impact of 53rd Week

The retail calendar for fiscal January 2013 included a fifth week, resulting in a 14-week fiscal fourth quarter and a 53-week year. During this 53rd week, total sales were $169 million; selling, general and administrative expenses were $30 million; interest was $2 million; net income was $15 million and diluted earnings per share was $0.06.

Dividend

On February 27, 2013 Kohl's Board of Directors declared a quarterly cash dividend on the Company's common stock of $0.35 per share, a nine percent increase over its previous dividend. The dividend is payable March 27, 2013 to shareholders of record at the close of business on March 13, 2013.

Store Update

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.

Earnings Guidance

The Company issued its initial guidance for fiscal 2013. Based on assumptions of total and comparable store sales increases of 0 to 2 percent, the Company expects earnings per diluted share of $4.15 to $4.45 for the year. For the first fiscal quarter, the Company expects earnings per diluted share of $0.55 to $0.63 per diluted share based on assumptions of a total sales increase of 0.5 to 2.5 percent and a comparable store sales increase of 0 to 2 percent.

Fourth Quarter 2012 Earnings Conference Call

Kohl's will host its quarterly earnings conference call at 8:30 am ET on February 28, 2013. The phone number for the conference call is (706) 902-0486 and the conference ID is 15143990. Replays of the call will be available for 30 days by dialing (855) 859-2056 or (404) 537-3406. 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 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 1,146 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.

KOHL'S CORPORATION

CONSOLIDATED STATEMENTS OF INCOME

(In Millions, except per share data)

(Unaudited)

Three Months

Twelve Months

Feb 2,
2013

Jan 28,
2012

Feb 2,
2013

Jan 28,
2012

(14 Weeks)

(13 Weeks)

(53 Weeks)

(52 Weeks)

Net sales

$

6,342

$

6,018

$

19,279

$

18,804

Cost of merchandise sold

4,230

3,841

12,289

11,625

Gross margin

2,112

2,177

6,990

7,179

Operating expenses:

Selling, general, and administrative

1,212

1,178

4,267

4,243

Depreciation and amortization

214

194

833

778

Operating income

686

805

1,890

2,158

Interest expense, net

85

76

329

299

Income before income taxes

601

729

1,561

1,859

Provision for income taxes

223

274

575

692

Net income

$

378

$

455

$

986

$

1,167

Basic net income per share

$

1.66

$

1.82

$

4.19

$

4.33

Average number of shares

227

251

235

270

Diluted net income per share

$

1.66

$

1.81

$

4.17

$

4.30

Average number of shares

228

252

237

271

As a percent of net sales:

Gross margin

33.3

%

36.2

%

36.3

%

38.2

%

Selling, general and

administrative expenses

19.1

%

19.6

%

22.1

%

22.6

%

Operating income

10.8

%

13.4

%

9.8

%

11.5

%

Net income

6.0

%

7.6

%

5.1

%

6.2

%

KOHL'S CORPORATION

CONSOLIDATED BALANCE SHEETS

(In Millions)

(Unaudited)

Feb 2,
2013

Jan 28,
2012

Assets

Current assets:

Cash and cash equivalents

$

537

$

1,205

Merchandise inventories

3,748

3,216

Deferred income taxes

122

109

Other

312

299

Total current assets

4,719

4,829

Property and equipment, net

8,872

8,905

Long-term investments

53

153

Other assets

261

261

Total assets

$

13,905

$

14,148

Liabilities and Shareholders' Equity

Current liabilities:

Accounts payable

$

1,307

$

1,233

Accrued liabilities

986

1,147

Income taxes payable

137

133

Current portion of capital lease

and financing obligations

105

94

Total current liabilities

2,535

2,607

Long-term debt

2,492

2,141

Capital lease and financing obligations

1,956

2,009

Deferred income taxes

362

423

Other long-term liabilities

512

460

Shareholders' equity

6,048

6,508

Total liabilities and shareholders' equity

$

13,905

$

14,148

KOHL'S CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Millions)

(Unaudited)

Feb 2,
2013

Jan 28,
2012

(53 Weeks)

(52 Weeks)

Operating activities

Net income

$

986

$

1,167

Adjustments to reconcile net income to net cash

provided by operating activities:

Depreciation and amortization

833

778

Share-based compensation

50

57

Excess tax benefits from share-based compensation

(4

)

(2

)

Deferred income taxes

(79

)

144

Other non-cash revenues and expenses

29

39

Changes in operating assets and liabilities:

Merchandise inventories

(523

)

(160

)

Other current and long-term assets

(37

)

(42

)

Accounts payable

74

96

Accrued and other long-term liabilities

(60

)

63

Income taxes

(4

)

(1

)

Net cash provided by operating activities

1,265

2,139

Investing activities

Acquisition of property and equipment

(785

)

(927

)

Sales of investments in auction rate securities

109

145

Other

16

(20

)

Net cash used in investing activities

(660

)

(802

)

Financing activities

Treasury stock purchases

(1,293

)

(2,311

)

Dividends paid

(300

)

(271

)

Proceeds from issuance of debt

350

646

Deferred financing costs

(3

)

(8

)

Long-term debt payments