MENOMONEE FALLS, Wis.--(BUSINESS WIRE)--Kohl’s Corporation (NYSE:KSS). Kohl’s Corporation today reported results for the quarter ended July 28, 2012.
Kohl’s Corporation reported second quarter net income of $240 million ($1.00 per diluted share) compared to $299 million ($1.08 per diluted share) a year ago. Net sales were $4.2 billion, a decrease of 1.0 percent for the quarter. Comparable store sales for the quarter decreased 2.7 percent.
Year to date, net income was $394 million ($1.63 per diluted share) compared to $500 million ($1.76 per diluted share) a year ago. Net sales were $8.4 billion, an increase of 0.4 percent. Year-to-date comparable store sales decreased 1.3 percent.
Kevin Mansell, Kohl’s chairman, president and chief executive officer, said, “Our sales performance in the second quarter was disappointing. Our gross margin performance for the quarter, however, was better than expected. Our teams remain disciplined in their expense management and, again, delivered solid results. We accomplished our goal of improving inventory levels for the fall season and our sales improved considerably in July as units were received. As we look forward to the fall season, we are excited about the fashion content and level of newness in our assortments.”
Quarterly Dividend Declared
On August 7, 2012, Kohl's Board of Directors declared a quarterly cash dividend on the Company's common stock of $0.32 per share. The dividend is payable September 26, 2012 to shareholders of record at the close of business on September 5, 2012.
Store Update
Kohl’s ended the quarter with 1,134 stores in 49 states, compared with 1,097 stores at the same time last year. During the first half of the year, the Company opened 9 new stores, including 1 relocated store, closed 1 store and completed 40 remodels. The company expects to open an additional 12 stores and complete an additional 10 remodels in September.
Earnings Guidance – Third Quarter
The Company provided initial guidance for the fiscal quarter ending October 27, 2012 of $0.83 to $0.89 per diluted share. The guidance is based on total sales growth of 1 to 3 percent and comparable store sales growth of flat to 2 percent and includes expected third quarter share repurchases of $300 million. After incorporating its second quarter results and third quarter outlook, the Company now expects to earn $4.50 to $4.65 per diluted share for fiscal 2012 versus its previous guidance of $4.75 per diluted share.
Second Quarter 2012 Earnings Conference Call
Kohl’s will host a second quarter earnings conference call at 8:30 am ET on August 9, 2012. The phone number for the conference call is (706) 902-0486 and the conference ID is 14680638. Replays of the call will be available for 30 days by dialing (855) 859-2056 or (404) 537-3406 and referencing Conference ID 14680638. The conference call is 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 (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 1,134 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 | |||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF INCOME | |||||||||||||
| (In Millions, except per share data) | |||||||||||||
| (Unaudited) | |||||||||||||
| Subject to Reclassification | |||||||||||||
| Three Months | Six Months | ||||||||||||
| (13 Weeks) Ended | (26 Weeks) Ended | ||||||||||||
| July 28, | July 30, | July 28, | July 30, | ||||||||||
| 2012 | 2011 | 2012 | 2011 | ||||||||||
| Net sales | $ | 4,205 | $ | 4,248 | $ | 8,447 | $ | 8,410 | |||||
| Cost of merchandise sold | 2,563 | 2,520 | 5,281 | 5,095 | |||||||||
| Gross margin | 1,642 | 1,728 | 3,166 | 3,315 | |||||||||
| Operating expenses: | |||||||||||||
| Selling, general, and administrative | 975 | 991 | 1,977 | 1,995 | |||||||||
| Depreciation and amortization | 210 | 190 | 411 | 382 | |||||||||
| Operating income | 457 | 547 | 778 | 938 | |||||||||
| Interest expense, net | 80 | 72 | 162 | 148 | |||||||||
| Income before income taxes | 377 | 475 | 616 | 790 | |||||||||
| Provision for income taxes | 137 | 176 | 222 | 290 | |||||||||
| Net income | $ | 240 | $ | 299 | $ | 394 | $ | 500 | |||||
| Basic net income per share | $ | 1.01 | $ | 1.08 | $ | 1.64 | $ | 1.77 | |||||
| Average number of shares | 238 | 276 | 240 | 282 | |||||||||
| Diluted net income per share | $ | 1.00 | $ | 1.08 | $ | 1.63 | $ | 1.76 | |||||
| Average number of shares | 239 | 278 | 242 | 284 | |||||||||
| As a percent of net sales: | |||||||||||||
| Gross margin | 39.0% | 40.7% | 37.5% | 39.4% | |||||||||
| Selling, general and | |||||||||||||
| administrative expenses | 23.2% | 23.3% | 23.4% | 23.7% | |||||||||
| Operating income | 10.9% | 12.9% | 9.2% | 11.2% | |||||||||
| Net income | 5.7% | 7.0% | 4.7% | 5.9% | |||||||||
| KOHL'S CORPORATION | ||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
| (In Millions) | ||||||||
| (Unaudited) | ||||||||
| Subject to Reclassification | ||||||||
| July 28, | July 30, | |||||||
| 2012 | 2011 | |||||||
|
Assets |
||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 600 | $ | 1,169 | ||||
| Merchandise inventories | 3,494 | 3,095 | ||||||
| Deferred income taxes | 109 | 115 | ||||||
| Other | 260 | 256 | ||||||
| Total current assets | 4,463 | 4,635 | ||||||
| Property and equipment, net | 9,010 | 8,876 | ||||||
| Long-term investments | 102 | 208 | ||||||
| Other assets | 254 | 255 | ||||||
| Total assets | $ | 13,829 | $ | 13,974 | ||||
|
Liabilities and Shareholders' Equity |
||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 1,531 | $ | 1,345 | ||||
| Accrued liabilities | 974 | 1,065 | ||||||
| Income taxes payable | 24 | 18 | ||||||
| Current portion of long-term debt | - | 100 | ||||||
| Current portion of capital lease | ||||||||
| and financing obligations | 94 | 89 | ||||||
| Total current liabilities | 2,623 | 2,617 | ||||||
| Long-term debt | 2,141 | 1,494 | ||||||
| Capital lease and financing obligations | 1,997 | 1,987 | ||||||
| Deferred income taxes | 411 | 338 | ||||||
| Other long-term liabilities | 469 | 460 | ||||||
| Shareholders' equity | 6,188 | 7,078 | ||||||
| Total liabilities and shareholders' equity | $ | 13,829 | $ | 13,974 | ||||
| KOHL'S CORPORATION | |||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||
| (In Millions) | |||||||||
| (Unaudited) | |||||||||
| Subject to Reclassification | |||||||||
| Six Months Ended | |||||||||
| July 28, | July 30, | ||||||||
| 2012 | 2011 | ||||||||
| Operating activities | |||||||||
| Net income | $ | 394 | $ | 500 | |||||
| Adjustments to reconcile net income to net cash | |||||||||
| provided by operating activities: | |||||||||
| Depreciation and amortization | 411 | 382 | |||||||
| Share-based compensation | 24 | 29 | |||||||
| Excess tax benefits from share-based compensation | (3 | ) | (1 | ) | |||||
| Deferred income taxes | (13 | ) | 42 | ||||||
| Other non-cash revenues and expenses | 8 | 13 | |||||||
| Changes in operating assets and liabilities: | |||||||||
| Merchandise inventories | (291 | ) | (57 | ) | |||||
| Other current and long-term assets | 40 | (14 | ) | ||||||
| Accounts payable | 298 | 208 | |||||||
| Accrued and other long-term liabilities | (175 | ) | (108 | ) | |||||
| Income taxes | (111 | ) | (114 | ) | |||||
| Net cash provided by operating activities | 582 | 880 | |||||||
| Investing activities | |||||||||
| Acquisition of property and equipment | (429 | ) | (479 | ) | |||||
| Sales of investments in auction rate securities | 51 | 97 | |||||||
| Other | 2 | (1 | ) | ||||||
| Net cash used in investing activities | (376 | ) | (383 | ) | |||||
| Financing activities | |||||||||
| Treasury stock purchases | (623 | ) | (1,166 | ) | |||||
| Dividends paid | (153 | ) | (142 | ) | |||||
| Long-term debt payments | - | (300 | ) | ||||||
| Proceeds from financing obligations | 4 | 8 | |||||||
| Capital lease and financing obligation payments | (61 | ) | (46 | ) | |||||
| Proceeds from stock option exercises | 19 | 43 | |||||||
| Excess tax benefits from share-based compensation | 3 | 1 | |||||||
| Other | - | (3 | ) | ||||||
| Net cash used in financing activities | (811 | ) | (1,605 | ) | |||||
| Net decrease in cash and cash equivalents | (605 | ) | (1,108 | ) | |||||
| Cash and cash equivalents at beginning of period | 1,205 | 2,277 | |||||||
| Cash and cash equivalents at end of period | $ | 600 | $ | 1,169 | |||||