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Press release from Business Wire

Kohl's Corporation Reports Second Quarter Financial Results

Thursday, August 15, 2013

Kohl's Corporation Reports Second Quarter Financial Results

07:00 EDT Thursday, August 15, 2013

MENOMONEE FALLS, Wis. (Business Wire) -- Kohl's Corporation (NYSE: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 sales 0.9 % (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 (NYSE: 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 Ended Six Months Ended
August 3, July 28, August 3, July 28,
2013 2012 2013 2012
Net sales $ 4,289 $ 4,205 $ 8,488 $ 8,447
Cost of merchandise sold 2,613   2,563   5,284   5,281  
 
Gross margin 1,676 1,642 3,204 3,166
 
Operating expenses:
Selling, general, and administrative 1,000 975 1,997 1,977
Depreciation and amortization 225   210   439   411  
 
Operating income 451 457 768 778
 
Interest expense, net 84   80   167   162  
 
Income before income taxes 367 377 601 616
Provision for income taxes 136   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 shares 220 238 221 240
 
Diluted net income per share $ 1.04 $ 1.00 $ 1.70 $ 1.63
Average number of shares 222 239 222 242
 
As a percent of net sales:
Gross margin 39.1 % 39.0 % 37.7 % 37.5 %
Selling, general and
administrative expenses 23.3 % 23.2 % 23.5 % 23.4 %
Operating income 10.5 % 10.9 % 9.0 % 9.2 %
Net income 5.4 % 5.7 % 4.5 % 4.7 %
 
KOHL'S CORPORATION
CONSOLIDATED BALANCE SHEETS
(In Millions)
(Unaudited)
   
August 3, July 28,
2013 2012

Assets

Current assets:
Cash and cash equivalents $ 592 $ 600
Merchandise inventories 3,856 3,521
Deferred income taxes 150 109
Other 284   260
 
Total current assets 4,882 4,490
 
Property and equipment, net 8,891 9,010
Long-term investments 58 102
Other assets 266   254
 
Total assets $ 14,097   $ 13,856
 

Liabilities and Shareholders' Equity

Current liabilities:
Accounts payable $ 1,396 $ 1,531
Accrued liabilities 1,065 1,001
Income taxes payable 75 24
Current portion of capital lease
and financing obligations 147   94
 
Total current liabilities 2,683 2,650
 
Long-term debt 2,492 2,141
Capital lease and financing obligations 1,948 1,997
Deferred income taxes 381 411
Other long-term liabilities 540 469
Shareholders' equity 6,053   6,188
 
Total liabilities and shareholders' equity $ 14,097   $ 13,856
 
KOHL'S CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Millions)
(Unaudited)
 
  Six Months Ended
August 3,   July 28,
2013 2012
Operating activities
Net income $ 378 $ 394
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 439 411
Share-based compensation 27 24
Excess tax benefits from share-based compensation (2 ) (3 )
Deferred income taxes (12 ) (13 )
Other non-cash revenues and expenses 18 8
Changes in operating assets and liabilities:
Merchandise inventories (103 ) (300 )
Other current and long-term assets 22 40
Accounts payable 89 298
Accrued and other long-term liabilities (20 ) (166 )
Income taxes (74 ) (111 )
 
Net cash provided by operating activities 762   582  
 
Investing activities
Acquisition of property and equipment (284 ) (429 )
Sales of investments in auction rate securities 1 51
Other 13   2  
 
Net cash used in investing activities (270 ) (376 )
 
Financing activities
Treasury stock purchases (279 ) (623 )
Dividends paid (153 ) (153 )
Proceeds from financing obligations 4
Capital lease and financing obligation payments (52 ) (61 )
Proceeds from stock option exercises 46 19
Excess tax benefits from share-based compensation 2 3
Deferred financing costs (1 )  
 
Net cash used in financing activities (437 ) (811 )
 
Net increase (decrease) in cash and cash equivalents 55 (605 )
Cash and cash equivalents at beginning of period 537   1,205  
 
Cash and cash equivalents at end of period $ 592   $ 600  
 

Kohl?s Corporation
Investor Relations:
Wes McDonald, Senior Executive Vice President and Chief Financial Officer
(262) 703-1893
or
Joanne Crevoiserat, Executive Vice President - Finance
(262) 703-2945
or
Media:
Jen Johnson, Director - Public Relations
(262) 703-5241

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