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Kohl's Corporation Reports Third Quarter Financial Results



  Kohl's Corporation Reports Third Quarter Financial Results

Business Wire

MENOMONEE FALLS, Wis. -- November 08, 2012

Kohl’s Corporation (NYSE:KSS). Kohl’s Corporation today reported results for
the fiscal periods ended October 27, 2012.

Kohl’s Corporation reported third quarter diluted earnings per share increased
14% to $0.91 per diluted share. Net income was $215 million compared to $211
million ($0.80 per diluted share) a year ago. Net sales were $4.5 billion, an
increase of 2.6% for the quarter. Comparable store sales for the quarter
increased 1.1%.

Year to date, net income was $609 million ($2.54 per diluted share) compared
to $711 million ($2.56 per diluted share) a year ago. Net sales were $12.9
billion, an increase of 1.2%. Year-to-date comparable store sales decreased
0.5%.

Kevin Mansell, Kohl’s chairman, president and chief executive officer, said,
“Our sales performance in the third quarter was consistent with our
expectations, while our gross margin results were better than expected. Thanks
to our dedicated teams, expenses were again well-managed. We have made
noticeable investments in Holiday inventory - both in depth and content - and
the in-store experience. Our stores are festive and fun to shop. We are also
very excited about our expanded gift strategy and our ability to offer great
products at great values."

Capital Structure

On November 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 December 26, 2012 to shareholders of record at the close of business
on December 5, 2012.

Kohl's Board of Directors also increased the Company's share repurchase
authorization under its existing share repurchase program by $3.2 billion, to
$3.5 billion. The Company expects to repurchase shares in open market
transactions, subject to market conditions, over the next three years.

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 provided initial guidance for the fiscal quarter ending February
2, 2013 of $2.00 to $2.08 per diluted share. The guidance is based on total
sales growth of 7 to 8 percent and comparable store sales growth of 3 to 4
percent and includes expected fourth quarter share repurchases of $300
million. After incorporating its third quarter results and fourth quarter
outlook, the Company now expects to earn $4.52 to $4.60 per diluted share for
fiscal 2012 versus its previous guidance of $4.50 to $4.65 per diluted share.

Third Quarter 2012 Earnings Conference Call

Kohl’s will host its quarterly earnings conference call at 8:30 am
ET on November 8, 2012. The phone number for the conference call is (706)
902-0486 and the conference ID is 15140640. Replays of the call will be
available for 30 days by dialing (855) 859-2056 or (404) 537-3406 and
referencing Conference ID 15140640. 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 1,146 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
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In Millions, except per share data)
(Unaudited)
Subject to Reclassification
                                                                   
                               Three Months            Nine Months
                               Oct 27,     Oct 29,     Oct 27,      Oct 29,
                               2012        2011        2012         2011
                                                                     
Net sales                      $ 4,490     $ 4,376     $ 12,937     $ 12,786
Cost of merchandise sold       2,778       2,688       8,059        7,784     
                                                                     
Gross margin                   1,712       1,688       4,878        5,002
                                                                     
Operating expenses:
Selling, general, and          1,077       1,071       3,055        3,066
administrative
Depreciation and               210         202         620          583       
amortization
                                                                     
Operating income               425         415         1,203        1,353
                                                                     
Interest expense, net          80          75          243          223       
                                                                     
Income before income taxes     345         340         960          1,130
Provision for income taxes     130         129         351          419       
                                                                     
Net income                     $ 215       $ 211       $ 609        $ 711     
                                                                     
Basic net income per share     $ 0.92      $ 0.80      $ 2.56       $ 2.58
Average number of shares       233         264         238          276
                                                                     
Diluted net income per share   $ 0.91      $ 0.80      $ 2.54       $ 2.56
Average number of shares       235         265         240          278
                                                                     
As a percent of net sales:
Gross margin                   38.1    %   38.6    %   37.7     %   39.1     %
Selling, general and
administrative expenses        24.0    %   24.5    %   23.6     %   24.0     %
Operating income               9.5     %   9.5     %   9.3      %   10.6     %
Net income                     4.8     %   4.8     %   4.7      %   5.6      %

 
KOHL'S CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Millions)
(Unaudited)
Subject to Reclassification
                                                         
                                             Oct 27,      Oct 29,
                                             2012         2011
Assets
Current assets:
Cash and cash equivalents                    $ 550        $ 760
Merchandise inventories                      4,818        4,130
Income tax receivable                        —            105
Deferred income taxes                        124          128
Other                                        281          257
                                                           
Total current assets                         5,773        5,380
                                                           
Property and equipment, net                  9,009        8,918
Long-term investments                        90           158
Other assets                                 256          263
                                                           
Total assets                                 $ 15,128     $ 14,719
                                                           
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable                             $ 2,429      $ 2,080
Accrued liabilities                          1,094        1,025
Income taxes payable                         48           —
Current portion of capital lease
and financing obligations                    100          95
                                                           
Total current liabilities                    3,671        3,200
                                                           
Long-term debt                               2,492        2,141
Capital lease and financing obligations      1,986        2,003
Deferred income taxes                        395          445
Other long-term liabilities                  478          459
Shareholders' equity                         6,106        6,471
                                                           
Total liabilities and shareholders' equity   $ 15,128     $ 14,719

 
KOHL'S CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Millions)
(Unaudited)
Subject to Reclassification
                                                              
                                                    Nine Months Ended
                                                    Oct 27,    Oct 29,
                                                    2012       2011
Operating activities
Net income                                          $  609     $  711
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization                       620        583
Share-based compensation                            37         43
Excess tax benefits from share-based compensation   (3     )   (2     )
Deferred income taxes                               (46    )   146
Other non-cash revenues and expenses                26         19
Changes in operating assets and liabilities:
Merchandise inventories                             (1,613 )   (1,091 )
Other current and long-term assets                  30         (1     )
Accounts payable                                    1,196      942
Accrued and other long-term liabilities             (62    )   (16    )
Income taxes                                        (91    )   (238   )
                                                                
Net cash provided by operating activities           703        1,096   
                                                                
Investing activities
Acquisition of property and equipment               (641   )   (755   )
Sales of investments in auction rate securities     68         143
Other                                               5          (20    )
                                                                
Net cash used in investing activities               (568   )   (632   )
                                                                
Financing activities
Treasury stock purchases                            (883   )   (1,956 )
Dividends paid                                      (227   )   (207   )
Proceeds from issuance of debt                      350        646
Deferred financing costs                            (3     )   (8     )
Long-term debt payments                             —          (400   )
Interest rate hedge payments                        —          (48    )
Proceeds from financing obligations                 7          12
Capital lease and financing obligation payments     (87    )   (69    )
Proceeds from stock option exercises                50         47
Excess tax benefits from share-based compensation   3          2       
                                                                
Net cash used in financing activities               (790   )   (1,981 )
                                                                
Net decrease in cash and cash equivalents           (655   )   (1,517 )
Cash and cash equivalents at beginning of period    1,205      2,277   
                                                                
Cash and cash equivalents at end of period          $  550     $  760  

Contact:

Kohl’s Corporation
Investor Relations:
Wes McDonald, Senior Executive Vice President and Chief Financial Officer
(262) 703-1893
or
Media:
Vicki Shamion, Senior Vice President - Public Relations
(262) 703-1464
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