Kohl's Corporation Reports First Quarter Financial Results

MENOMONEE FALLS, Wis.--()--Kohl’s Corporation (NYSE:KSS) today reported results for the quarter ended April 30, 2016.

             
($ in millions)   2016   2015   Change
Sales   $ 3,972   $ 4,123   (3.7)%
Comparable store sales (3.9 )% 1.4 % -
Gross margin 35.5 % 36.9 % (139) bp
Selling, general, and administrative expenses $ 1,008 $ 1,016 (1)%
Reported
Net income $ 17 $ 127 (87)%
Diluted earnings per share $ 0.09 $ 0.63 (86)%
Excluding impairments, store
closing and other costs
Net income $ 58 $ 127 (55)%
Diluted earnings per share   $ 0.31     $ 0.63     (50)%
 

Kevin Mansell, Kohl's chairman, chief executive officer and president, said, "First quarter sales were challenging. Despite the sales environment, we were able to manage our gross margin and inventory levels consistent with our expectations as we took the markdowns necessary to clear excess inventory. We managed our expenses effectively throughout the quarter as every area contributed to our savings versus our plan."

Dividend

On May 11, 2016, the Kohl's Board of Directors declared a quarterly cash dividend on the Company's common stock of $0.50 per share. The dividend is payable June 22, 2016 to shareholders of record at the close of business on June 8, 2016.

Store Update

Kohl’s ended the quarter with 1,167 stores in 49 states, compared with 1,164 stores at the same time last year.

First Quarter 2016 Earnings Conference Call

Kohl's will host its quarterly earnings conference call at 8:30 am ET on May 12, 2016. The phone number for the conference call is (800) 230-1074. Replays of the call will be available for 30 days by dialing (800) 475-6701. The conference ID for both the live call and the replay is 386534. The conference call and replays are also accessible via the Company's web site at http://www.kohlscorporation.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. 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

Kohl’s (NYSE: KSS) is a leading specialty department store with more than 1,100 stores in 49 states. With a commitment to inspiring and empowering families to lead fulfilled lives, the company offers amazing national and exclusive brands, incredible savings and inspiring shopping experiences in-store, online at Kohls.com and via mobile devices. Committed to its communities, Kohl’s has raised nearly $300 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 additional information about Kohl’s philanthropic and environmental initiatives, visit www.Kohls.com/Cares. For a list of store locations and information, or for the added convenience of shopping online, visit www.Kohls.com.

Connect with Kohl’s:

Facebook (http://www.facebook.com/Kohls)

Twitter (http://twitter.com/Kohls)

Google+ (http://plus.google.com/+Kohls)

Pinterest (http://pinterest.com/Kohls)

Instagram (http://instagram.com/Kohls)

YouTube (http://www.youtube.com/Kohls)

 
KOHL'S CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(In Millions, except per share data)
(Unaudited)
   
Three Months Ended
April 30,
2016
May 2,
2015
Net sales $ 3,972 $ 4,123
Cost of merchandise sold 2,560   2,600  
 
Gross margin 1,412 1,523
 
Operating expenses:
Selling, general, and administrative 1,008 1,016
Depreciation and amortization 234 227
Impairments, store closing and other costs 64    
 
Operating income 106 280
 
Interest expense, net 79   84  
 
Income before income taxes 27 196
Provision for income taxes 10   69  
 
Net income $ 17   $ 127  
 
Basic net income per share $ 0.09 $ 0.64
Average number of shares 183 200
 
Diluted net income per share $ 0.09 $ 0.63
Average number of shares 184 202
 
As a percent of net sales:
Gross margin 35.5 % 36.9 %
Selling, general and administrative expenses 25.4 % 24.6 %
Operating income 2.7 % 6.8 %
Net income 0.4 % 3.1 %
 
Excluding impairments, store closing
and other costs
Net income $ 58 $ 127
Diluted net income per share $ 0.31 $ 0.63
As a percent of net sales:
Operating income 4.3 % 6.8 %
Net income 1.5 % 3.1 %
 
KOHL'S CORPORATION
CONSOLIDATED BALANCE SHEETS
(In Millions)
(Unaudited)
   
April 30,
2016
May 2,
2015

Assets

Current assets:
Cash and cash equivalents $ 423 $ 1,195
Merchandise inventories 4,084 4,165
Other 348   338
 
Total current assets 4,855 5,698
 
Property and equipment, net 8,230 8,518
Other assets 219   237
 
Total assets $ 13,304   $ 14,453
 

Liabilities and Shareholders' Equity

Current liabilities:
Accounts payable $ 1,346 $ 1,645
Accrued liabilities 1,126 1,140
Income taxes payable 48 87
Current portion of capital lease
and financing obligations 127   113
 
Total current liabilities 2,647 2,985
 
Long-term debt 2,793 2,780
Capital lease and financing obligations 1,770 1,840
Deferred income taxes 239 275
Other long-term liabilities 558 556
Shareholders' equity 5,297   6,017
 
Total liabilities and shareholders' equity $ 13,304   $ 14,453
 
KOHL'S CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Millions)
(Unaudited)
  Three Months Ended
April 30,
2016
  May 2,
2015
Operating activities
Net income $ 17 $ 127
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 234 227
Share-based compensation 12 14
Excess tax benefits from share-based compensation (9 )
Deferred income taxes (18 ) (23 )
Other non-cash revenues and expenses 7 10
Impairments, store closing and other costs 64
Changes in operating assets and liabilities:
Merchandise inventories (44 ) (349 )
Other current and long-term assets (15 ) 28
Accounts payable 95 134
Accrued and other long-term liabilities (125 ) (69 )
Income taxes (87 ) 12  
Net cash provided by operating activities 140   102  
 
Investing activities
Acquisition of property and equipment (177 ) (176 )
Other 3   1  
Net cash used in investing activities (174 ) (175 )
 
Financing activities
Treasury stock purchases (126 ) (147 )
Shares withheld for taxes on vested restricted shares (12 ) (18 )
Dividends paid (91 ) (90 )
Capital lease and financing obligation payments (31 ) (27 )
Proceeds from stock option exercises 6 134
Excess tax benefits from share-based compensation 9
Proceeds from financing obligations 4    
Net cash used in financing activities (250 ) (139 )
 
Net decrease in cash and cash equivalents (284 ) (212 )
Cash and cash equivalents at beginning of period 707   1,407  
Cash and cash equivalents at end of period $ 423   $ 1,195  

Contacts

Kohl’s Corporation
Investor Relations:
Wes McDonald, Chief Financial Officer, (262) 703-1893
or
Media:
Jennifer Johnson, VP Corporate Communications, (262) 703-5241

Contacts

Kohl’s Corporation
Investor Relations:
Wes McDonald, Chief Financial Officer, (262) 703-1893
or
Media:
Jennifer Johnson, VP Corporate Communications, (262) 703-5241