Kohl's Corporation Reports First Quarter Financial Results

  Kohl's Corporation Reports First Quarter Financial Results

Business Wire

MENOMONEE FALLS, Wis. -- May 15, 2014

Kohl’s Corporation (NYSE:KSS). Kohl’s Corporation today reported results for
the quarter endedMay3, 2014.

                           
                            Quarter
($ in millions)             2014       2013       Change
Sales                        $ 4,070     $ 4,199     (3.1)%
Comparable store sales       (3.4    )%   (1.9    )%   -
Net income                   $ 125        $ 147        (15)%
Diluted earnings per share  $ 0.60     $ 0.66     (9)%
                                                       

Kevin Mansell, Kohl's chairman, president and chief executive officer, said,
“We did not achieve our first quarter sales goals, but we were encouraged by
the improvement in sales as the quarter progressed. Our teams managed our
inventory levels appropriately and expenses were controlled throughout the
organization during the quarter."

Guidance

The Company expects diluted earnings per share of $4.05 to $4.45 for fiscal
2014, which is consistent with its previous guidance.

Dividend

OnMay 14, 2014, Kohl's Board of Directors declared a quarterly cash dividend
on the Company's common stock of$0.39per share. The dividend is payable June
25, 2014to shareholders of record at the close of business onJune 11, 2014.

Store Update

Kohl’s ended the quarter with 1,160 stores in 49 states, compared with 1,155
stores at the same time last year. The Company opened four new store
locations, relocated one existing store and permanently closed two stores
during the first quarter of 2014.

Credit Card Agreement with Capital One

The Company extended its current credit card agreement with Capital One for an
additional five years untilMarch 31, 2023.

First Quarter 2014 Earnings Conference Call

Kohl's will host its quarterly earnings conference call at 8:30 am ET on May
15, 2014. 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 24989593.
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

Kohl’s (NYSE: KSS) is a leading specialty department store with 1,160 stores
in 49 states. With a commitment to inspiring and empowering families to lead
fulfilled lives, the company offers amazing national and exclusive brands,
incredible savings and inspiring shopping experiences in-store,
onlineatKohls.comand via mobile devices.Committed to our communities,
Kohl’s has raised more than$257 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 additional information about Kohl’s philanthropic and environmental
initiatives, visitwww.Kohls.com/Cares.For a list of store locations and
information, or for the added convenience of shopping online,
visitwww.Kohls.com.

Connect with Kohl’s:
Facebook (http://www.facebook.com/Kohls)
Twitter (http://twitter.com/Kohls)
Google+(http://plus.google.com/+Kohls)
Pinterest (http://pinterest.com/Kohls)
Instagram (http://instagram.com/Kohls)


KOHL'S CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(In Millions, except per share data)
(Unaudited)
                                     
                                       Three Months Ended
                                       May 3,     May 4,
                                       2014        2013
Net sales                              $ 4,070     $ 4,199
Cost of merchandise sold               2,574      2,671   
                                                           
Gross margin                           1,496       1,528
                                                           
Operating expenses:
Selling, general, and administrative   1,000       997
Depreciation and amortization          216        214     
                                                           
Operating income                       280         317
                                                           
Interest expense, net                  85         83      
                                                           
Income before income taxes             195         234
Provision for income taxes             70         87      
                                                           
Net income                             $ 125      $ 147   
                                                           
Basic net income per share             $ 0.60      $ 0.66
Average number of shares               206         222
                                                           
Diluted net income per share           $ 0.60      $ 0.66
Average number of shares               208         223
                                                           
As a percent of net sales:
Gross margin                           36.8    %   36.4    %
Selling, general and
administrative expenses                24.6    %   23.7    %
Operating income                       6.9     %   7.6     %
Net income                             3.1     %   3.5     %


KOHL'S CORPORATION
CONSOLIDATED BALANCE SHEETS
(In Millions)
(Unaudited)
                                                      
                                             May 3,       May 4,
                                             2014        2013
Assets
Current assets:
Cash and cash equivalents                    $ 717        $ 518
Merchandise inventories                      3,981        3,961
Deferred income taxes                        137          138
Other                                        280         294
                                                          
Total current assets                         5,115        4,911
                                                          
Property and equipment, net                  8,677        8,822
Other assets                                 341         317
                                                          
Total assets                                 $ 14,133    $ 14,050
                                                          
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable                             $ 1,382      $ 1,452
Accrued liabilities                          1,078        1,023
Income taxes payable                         49           117
Current portion of capital lease
and financing obligations                    112         107
                                                          
Total current liabilities                    2,621        2,699
                                                          
Long-term debt                               2,792        2,492
Capital lease and financing obligations      1,919        1,938
Deferred income taxes                        382          368
Other long-term liabilities                  562          532
Shareholders' equity                         5,857       6,021
                                                          
Total liabilities and shareholders' equity   $ 14,133    $ 14,050


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

                                                       Three Months Ended
                                                        May 3,    May 4,
                                                        2014       2013
Operating activities
Net income                                              $  125     $ 147
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization                           216        214
Share-based compensation                                11         9
Excess tax benefits from share-based compensation       (2     )   (1    )
Deferred income taxes                                   5          (13   )
Other non-cash revenues and expenses                    5          11
Changes in operating assets and liabilities:
Merchandise inventories                                 (105   )   (210  )
Other current and long-term assets                      17         21
Accounts payable                                        17         145
Accrued and other long-term liabilities                 (44    )   11
Income taxes                                            (66    )   (29   )
                                                                         
Net cash provided by operating activities               179       305   
                                                                         
Investing activities
Acquisition of property and equipment                   (176   )   (135  )
Other                                                   4         12    
                                                                         
Net cash used in investing activities                   (172   )   (123  )
                                                                         
Financing activities
Treasury stock purchases                                (167   )   (101  )
Shares withheld for taxes on vested restricted shares   (14    )   (8    )
Dividends paid                                          (80    )   (77   )
Proceeds from financing obligations                     3          —
Capital lease and financing obligation payments         (29    )   (24   )
Proceeds from stock option exercises                    24         8
Excess tax benefits from share-based compensation       2         1     
                                                                         
Net cash used in financing activities                   (261   )  (201  )
                                                                         
Net decrease in cash and cash equivalents               (254   )   (19   )
Cash and cash equivalents at beginning of period        971       537   
                                                                         
Cash and cash equivalents at end of period              $  717    $ 518 
                                                                         

Contact:

Kohl’s Corporation
Investor Relations:
Wes McDonald, Senior Executive Vice President and Chief Financial Officer
(262) 703-1893
or
Media:
Bevin Bailis, SVP, PR and Communications
(262) 703-1464
 
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