Kohl's Corporation Reports Second Quarter Financial Results

  Kohl's Corporation Reports Second Quarter Financial Results

Business Wire

MENOMONEE FALLS, Wis. -- August 14, 2014

Kohl’s Corporation (NYSE:KSS). Kohl’s Corporation today reported results for
the quarter endedAugust2, 2014.

                                            
            Quarter                           Year to Date
($ in       2014        2013       Change   2014        2013        Change
millions)
Sales        $ 4,242     $ 4,289    (1.1 )%   $ 8,312     $ 8,488     (2.1 )%
Comparable
store        (1.3    )%    0.9   %   -          (2.3  )%    (0.5  )%   -
sales
Net income   $ 232        $ 231       —    %    $ 357        $ 378        (6   )%
Diluted
earnings    $ 1.13     $ 1.04    9    %   $ 1.73     $ 1.70     2    %
per share
                                                                          

Kevin Mansell, Kohl's chairman, president and chief executive officer, said,
“We are pleased with the improvement we saw in sales as the quarter
progressed. The improvement was the most dramatic in the month of July where
we achieved a positive comp. As they consistently do, our teams did a great
job of managing expenses throughout the quarter. We enter the back-to-school
season with fresh, new inventory and encouraging momentum."

Dividend

OnAugust 12, 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 September 24, 2014to shareholders of record at the close of business
onSeptember 10, 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. It expects to open four new stores this
Fall, including one store which was temporarily closed in the first quarter
for a complete re-build.

Second Quarter 2014 Earnings Conference Call

Kohl's will host its quarterly earnings conference call at 8:30 am ET on
August 14, 2014. The phone number for the conference call is (800) 230-1096.
Replays of the call will be available for 30 days by dialing (800) 475-6701.
The conference ID for both the live call and the replay is 333513. 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. 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      Six Months Ended
                                 August 2,   August 3,   August 2,   August 3,
                                 2014        2013        2014        2013
Net sales                        $ 4,242     $ 4,289     $ 8,312     $ 8,488
Cost of merchandise sold         2,588      2,613      5,162      5,284   
                                                                             
Gross margin                     1,654       1,676       3,150       3,204
                                                                             
Operating expenses:
Selling, general, and            981         1,000       1,981       1,997
administrative
Depreciation and amortization    222        225        438        439     
                                                                             
Operating income                 451         451         731         768
                                                                             
Interest expense, net            85         84         170        167     
                                                                             
Income before income taxes       366         367         561         601
Provision for income taxes       134        136        204        223     
                                                                             
Net income                       $ 232      $ 231      $ 357      $ 378   
                                                                             
Basic net income per share       $ 1.14      $ 1.05      $ 1.74      $ 1.71
Average number of shares         204         220         205         221
                                                                             
Diluted net income per share     $ 1.13      $ 1.04      $ 1.73      $ 1.70
Average number of shares         205         222         206         222
                                                                             
As a percent of net sales:
Gross margin                     39.0    %   39.1    %   37.9    %   37.7    %
Selling, general and             23.1    %   23.3    %   23.8    %   23.5    %
administrative expenses
Operating income                 10.6    %   10.5    %   8.8     %   9.0     %
Net income                       5.5     %   5.4     %   4.3     %   4.5     %


KOHL'S CORPORATION
CONSOLIDATED BALANCE SHEETS
(In Millions)
(Unaudited)
                                                                  
                                                         August 2,   August 3,
                                                         2014        2013
Assets
Current assets:
Cash and cash equivalents                                $  746      $  592
Merchandise inventories                                  3,899       3,856
Deferred income taxes                                    132         150
Other                                                    300         284
                                                                     
Total current assets                                     5,077       4,882
                                                                     
Property and equipment, net                              8,686       8,891
Other assets                                             338         324
                                                                     
Total assets                                             $  14,101   $  14,097
                                                                     
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable                                         $  1,479    $  1,396
Accrued liabilities                                      1,057       1,065
Income taxes payable                                     43          75
Current portion of capital lease and financing           105         147
obligations
                                                                     
Total current liabilities                                2,684       2,683
                                                                     
Long-term debt                                           2,792       2,492
Capital lease and financing obligations                  1,896       1,948
Deferred income taxes                                    358         381
Other long-term liabilities                              562         540
Shareholders' equity                                     5,809       6,053
                                                                     
Total liabilities and shareholders' equity               $  14,101   $  14,097


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

                                                        Six Months Ended
                                                         August 2,  August 3,
                                                         2014        2013
Operating activities
Net income                                               $  357      $  378
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization                            438         439
Share-based compensation                                 24          27
Excess tax benefits from share-based compensation        (2      )   (2      )
Deferred income taxes                                    (17     )   (12     )
Other non-cash revenues and expenses                     11          18
Changes in operating assets and liabilities:
Merchandise inventories                                  (20     )   (103    )
Other current and long-term assets                       3           22
Accounts payable                                         114         89
Accrued and other long-term liabilities                  (103    )   (20     )
Income taxes                                             (75     )   (74     )
                                                                             
Net cash provided by operating activities                730        762     
                                                                             
Investing activities
Acquisition of property and equipment                    (374    )   (284    )
Other                                                    6          14      
                                                                             
Net cash used in investing activities                    (368    )   (270    )
                                                                             
Financing activities
Treasury stock purchases                                 (392    )   (266    )
Shares withheld for taxes on vested restricted shares    (16     )   (13     )
Dividends paid                                           (160    )   (153    )
Proceeds from financing obligations                      3           —
Capital lease and financing obligation payments          (61     )   (52     )
Proceeds from stock option exercises                     37          46
Excess tax benefits from share-based compensation        2           2
Deferred financing costs                                 —          (1      )
                                                                             
Net cash used in financing activities                    (587    )  (437    )
                                                                             
Net increase (decrease) in cash and cash equivalents     (225    )   55
Cash and cash equivalents at beginning of period         971        537     
                                                                             
Cash and cash equivalents at end of period               $  746     $  592  

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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