Kohl's Corporation Reports Second Quarter Financial Results

  Kohl's Corporation Reports Second Quarter Financial Results

Business Wire

MENOMONEE FALLS, Wis. -- August 15, 2013

Kohl’s Corporation (NYSE:KSS). Kohl’s Corporation today reported results for
the quarter and year-to-date period endedAugust3, 2013.

                                                               
                  Quarter                          Year to Date
      ($ in       2013      2012       Change  2013       2012       Change
      millions)
      Sales        $ 4,289    $ 4,205     2.0%     $ 8,488     $ 8,447     0.5%
      Comparable
      store        0.9     %   (2.7    )%   -        (0.5    )%   (1.3    )%   -
      sales
      Net income   $ 231       $ 240        (4)%     $ 378        $ 394        (4)%
      Diluted
      earnings    $ 1.04    $ 1.00     4%      $ 1.70     $ 1.63     4%
      per share
                                                                               

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

OnAugust 13, 2013, Kohl's Board of Directors declared a quarterly cash
dividend on the Company's common stock of$0.35per share. The dividend is
payable September 25, 2013to shareholders of record at the close of business
onSeptember 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 causeKohl'sactual 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 inKohl'sfilings with theSEC.

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            1,000       975         1,997       1,977
administrative
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 
                                                                          

Contact:

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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