Kohl's Corporation Reports Fourth Quarter Financial Results

  Kohl's Corporation Reports Fourth Quarter Financial Results

Business Wire

MENOMONEE FALLS, Wis. -- February 27, 2014

Kohl’s Corporation (NYSE:KSS). Kohl’s Corporation today reported results for
the quarter and fiscal year endedFebruary1, 2014.


            Quarter                          Year
($ in
millions,
except per  2013        2012       Change  2013         2012        Change
share
amounts)
Increase
(decrease)                                                           
in
comparable
sales ^      (2.0    )%   1.9     %   -        (1.2     )%   0.3      %   -
(1)
                                                                          
Total        $ 6,099      $ 6,342     (3.8)%   $ 19,031      $ 19,279     (1.3)%
sales^(2)
Net income   $ 334        $ 378       (12)%    $ 889         $ 986        (10)%
Diluted
earnings    $ 1.56     $ 1.66    (6)%    $ 4.05      $ 4.17     (3)%
per share

^(1) Compares the periods ended February 1, 2014 to the periods ended January
26, 2013
^(2) Compares the periods ended February 1, 2014 to the periods ended February
2, 2013


Kevin Mansell, Kohl’s chairman, president and chief executive officer, said,
"We were pleased with our sales during the November and December holiday
season as the customer responded favorably to our merchandise and values.
Despite increased shipping costs related to our E-Commerce business, we were
able to achieve our gross margin guidance for the quarter. We believe our
inventory levels and assortment are well-positioned as we transition into the
spring season."

Impact of 53rd Week in Fiscal 2012

The retail calendar for fiscal January 2013 included a fifth week, resulting
in a 14-week fiscal fourth quarter and a 53-week year. During this 53^rd week,
total sales were $169 million; selling, general and administrative expenses
were $30 million; interest was $2 million; net income was $15 million and
diluted earnings per share was $0.06.

Dividend

OnFebruary 26, 2014 Kohl's Board of Directors declared a quarterly cash
dividend on the Company's common stock of$0.39per share, an increase of 11
percent over its previous dividend. The dividend is payable March 26, 2014to
shareholders of record at the close of business onMarch 12, 2014.

Store Update

Kohl’s ended the quarter with 1,158 stores in 49 states, compared with 1,146
stores at the same time last year. During 2013, the Company opened 12 new
stores and completed 30 remodels.

Earnings Guidance

The Company issued its initial guidance for fiscal 2014. Based on assumptions
of total sales increases of 0.5 percent to 2.5 percent and comparable sales
increases of 0 to 2 percent, the Company expects earnings per diluted share of
$4.05 to $4.45 for the year.

Fourth Quarter 2013 Earnings Conference Call

Kohl’s will host its quarterly earnings conference call at8:30 am
ETonFebruary 27, 2014. The phone number for the conference call is (706)
902-0486 and the conference ID is 24984977. Replays of the call will be
available for 30 days by dialing (855) 859-2056 or (404) 537-3406. 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 earnings.Kohl'sintends 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 1,158 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              Twelve Months
                             Feb 1,       Feb 2,       Feb 1,       Feb 2,
                             2014         2013         2014         2013
                             (13 Weeks)   (14 Weeks)   (52 Weeks)   (53 Weeks)
                                                                    
Net sales                    $  6,099     $  6,342     $ 19,031     $ 19,279
Cost of merchandise sold     4,024       4,230       12,087      12,289   
                                                                    
Gross margin                 2,075        2,112        6,944        6,990
                                                                    
Operating expenses:
Selling, general, and        1,242        1,212        4,313        4,267
administrative
Depreciation and             224         214         889         833      
amortization
                                                                    
Operating income             609          686          1,742        1,890
                                                                    
Interest expense, net        87          85          338         329      
                                                                    
Income before income taxes   522          601          1,404        1,561
Provision for income taxes   188         223         515         575      
                                                                    
Net income                   $  334      $  378      $ 889       $ 986    
                                                                    
Basic net income per share   $  1.57      $  1.66      $ 4.08       $ 4.19
Average number of shares     213          227          218          235
                                                                    
Diluted net income per       $  1.56      $  1.66      $ 4.05       $ 4.17
share
Average number of shares     215          228          220          237
                                                                    
As a percent of net sales:
Gross margin                 34.0     %   33.3     %   36.5     %   36.3     %
Selling, general and
administrative expenses      20.4     %   19.1     %   22.7     %   22.1     %
Operating income             10.0     %   10.8     %   9.2      %   9.8      %
Net income                   5.5      %   6.0      %   4.7      %   5.1      %


KOHL'S CORPORATION
CONSOLIDATED BALANCE SHEETS
(In Millions)
(Unaudited)
                                                       
                                             Feb 1,       Feb 2,
                                             2014         2013
Assets
Current assets:
Cash and cash equivalents                    $ 971        $ 537
Merchandise inventories                      3,874        3,748
Deferred income taxes                        142          122
Other                                        305        312
                                                          
Total current assets                         5,292        4,719
                                                          
Property and equipment, net                  8,745        8,872
Long-term investments                        64           53
Other assets                                 277         261
                                                          
Total assets                                 $ 14,378    $ 13,905
                                                          
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable                             $ 1,365      $ 1,307
Accrued liabilities                          1,138        986
Income taxes payable                         94           137
Current portion of capital lease
and financing obligations                    139         105
                                                          
Total current liabilities                    2,736        2,535
                                                          
Long-term debt                               2,792        2,492
Capital lease and financing obligations      1,930        1,956
Deferred income taxes                        382          362
Other long-term liabilities                  560          512
Shareholders' equity                         5,978       6,048
                                                          
Total liabilities and shareholders' equity   $ 14,378    $ 13,905


KOHL'S CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Millions)
(Unaudited)

                                                      Feb 1,      Feb 2,
                                                       2014         2013
                                                       (52 Weeks)   (53 Weeks)
Operating activities
Net income                                             $  889       $   986
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization                          889          833
Share-based compensation                               55           50
Excess tax benefits from share-based compensation      (3      )    (4       )
Deferred income taxes                                  (7      )    (79      )
Other non-cash revenues and expenses                   43           29
Changes in operating assets and liabilities:
Merchandise inventories                                (116    )    (523     )
Other current and long-term assets                     (11     )    (37      )
Accounts payable                                       58           74
Accrued and other long-term liabilities                149          (60      )
Income taxes                                           (62     )    (4       )
                                                                    
Net cash provided by operating activities              1,884       1,265    
                                                                    
Investing activities
Acquisition of property and equipment                  (643    )    (785     )
Sales of investments in auction rate securities        1            109
Other                                                  19          16       
                                                                    
Net cash used in investing activities                  (623    )    (660     )
                                                                    
Financing activities
Treasury stock purchases                               (799    )    (1,284   )
Shares withheld for restricted shares                  (13     )    (9       )
Dividends paid                                         (302    )    (300     )
Proceeds from issuance of debt                         300          350
Deferred financing costs                               (4      )    (3       )
Proceeds from financing obligations                    1            12
Capital lease and financing obligation payments        (115    )    (111     )
Proceeds from stock option exercises                   102          68
Excess tax benefits from share-based compensation      3           4        
                                                                    
Net cash used in financing activities                  (827    )    (1,273   )
                                                                    
Net increase (decrease) in cash and cash equivalents   434          (668     )
Cash and cash equivalents at beginning of period       537         1,205    
                                                                    
Cash and cash equivalents at end of period             $  971      $   537  


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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