MENOMONEE FALLS, Wisconsin
,
November 17, 2022
(press release)
–
Kohl’s Corporation (NYSE:KSS) today reported results for the quarter ended October 29, 2022. Three Months Nine Months ($ in millions, except per share data) October 29, 2022 October 30, 2021 Change October 29, 2022 October 30, 2021 Change Total revenue $ 4,277 $ 4,600 (7.0 %) $ 12,079 $ 12,934 (6.6 %) Net sales(1) (7.2 %) 15.5 % (7.1 %) 33.9 % Gross margin 37.3 % 39.9 % (263) bps 38.4 % 40.6 % (215) bps Selling, general, and administrative expenses $ 1,334 $ 1,380 (3.3 %) $ 3,910 $ 3,791 3.1 % Reported Net income $ 97 $ 243 (60 %) $ 254 $ 639 (60 %) Diluted earnings per share $ 0.82 $ 1.65 (50 %) $ 2.02 $ 4.19 (52 %) Non-GAAP(2) Adjusted net income $ 97 $ 243 (60 %) $ 254 $ 790 (68 %) Adjusted diluted earnings per share $ 0.82 $ 1.65 (50 %) $ 2.02 $ 5.18 (61 %) (1) Represents change in Net sales vs. prior year period. (2) Amounts shown for the three and nine months ended October 29, 2022 and the three months ended October 30, 2021 are GAAP as there are no adjustments to Non-GAAP. These amounts are shown for comparability purposes. “The Kohl’s Board is focused on supporting the management team during this CEO transition period, as well as the Board’s search committee in its pursuit of finding the next CEO to lead Kohl’s. We look forward to partnering with Interim CEO Tom Kingsbury and the entire leadership team to execute at the highest level this holiday season, while also capitalizing on opportunities to strengthen the business. Kohl’s is a great company with extremely bright prospects and I am confident we will find the right candidate to successfully position Kohl’s to drive sales, grow earnings and create shareholder value. On behalf of the Board, I want to thank all of our associates for their dedication and hard work,” said Peter Boneparth, Kohl’s Independent Board Chair. 2022 Outlook Commentary Accelerated Share Repurchase Agreement Dividend Third Quarter 2022 Earnings Conference Call Cautionary Statement Regarding Forward-Looking Information and Non-GAAP Measures In this press release, the Company provides information regarding adjusted net income and adjusted diluted earnings per share, which are not recognized terms under U.S. generally accepted accounting principles (“GAAP”) and do not purport to be alternatives to net income as a measure of operating performance. A reconciliation of adjusted net income and adjusted diluted earnings per share is provided in this release. The Company believes that the use of these non-GAAP financial measures provides investors with enhanced visibility into its results with respect to the impact of certain costs. Because not all companies use identical calculations, these presentations may not be comparable to other similarly titled measures of other companies. About Kohl's KOHL’S CORPORATION Three Months Ended Nine Months Ended (Dollars in Millions, Except per Share Data) October 29, 2022 October 30, 2021 October 29, 2022 October 30, 2021 Net sales $ 4,052 $ 4,366 $ 11,386 $ 12,251 Other revenue 225 234 693 683 Total revenue 4,277 4,600 12,079 12,934 Cost of merchandise sold 2,541 2,623 7,013 7,282 Gross margin rate 37.3 % 39.9 % 38.4 % 40.6 % Operating expenses: Selling, general, and administrative 1,334 1,380 3,910 3,791 As a percent of total revenue 31.2 % 30.0 % 32.4 % 29.3 % Depreciation and amortization 202 210 608 631 Operating income 200 387 548 1,230 Interest expense, net 81 66 226 195 Loss on extinguishment of debt — — — 201 Income before income taxes 119 321 322 834 Provision for income taxes 22 78 68 195 Net income $ 97 $ 243 $ 254 $ 639 Average number of shares: Basic 118 145 124 151 Diluted 119 147 126 153 Earnings per share: Basic $ 0.82 $ 1.67 $ 2.05 $ 4.24 Diluted $ 0.82 $ 1.65 $ 2.02 $ 4.19 ADJUSTED NET INCOME AND DILUTED EARNINGS PER SHARE, NON-GAAP FINANCIAL MEASURES Three Months Ended Nine Months Ended (Dollars in Millions, Except per Share Data) October 29, 2022 October 30, 2021 October 29, 2022 October 30, 2021 Net income GAAP $ 97 $ 243 $ 254 $ 639 Loss on extinguishment of debt — — — 201 Income tax impact of items noted above — — — (50 ) Adjusted (non-GAAP) $ 97 $ 243 $ 254 $ 790 Diluted earnings per share GAAP $ 0.82 $ 1.65 $ 2.02 $ 4.19 Loss on extinguishment of debt — — — 1.32 Income tax impact of items noted above — — — (0.33 ) Adjusted (non-GAAP)(1) $ 0.82 $ 1.65 $ 2.02 $ 5.18 (1) Amounts shown for the three and nine months ended October 29, 2022 and the three months ended October 30, 2021 are GAAP as there are no adjustments to Non-GAAP. These amounts are shown for comparability purposes. KOHL’S CORPORATION (Dollars in Millions) October 29, 2022 October 30, 2021 Assets Current assets: Cash and cash equivalents $ 194 $ 1,873 Merchandise inventories 4,874 3,642 Other 366 373 Total current assets 5,434 5,888 Property and equipment, net 8,117 7,329 Operating leases 2,318 2,293 Other assets 365 441 Total assets $ 16,234 $ 15,951 Liabilities and Shareholders' Equity Current liabilities: Accounts payable $ 2,014 $ 2,135 Accrued liabilities 1,436 1,545 Borrowings under revolving credit facility 668 — Current portion of: Long-term debt 164 — Finance leases and financing obligations 95 117 Operating leases 109 142 Total current liabilities 4,486 3,939 Long-term debt 1,747 1,909 Finance leases and financing obligations 2,791 2,072 Operating leases 2,595 2,537 Deferred income taxes 165 196 Other long-term liabilities 354 367 Shareholders' equity 4,096 4,931 Total liabilities and shareholders' equity $ 16,234 $ 15,951 KOHL’S CORPORATION Nine Months Ended (Dollars in Millions) October 29, 2022 October 30, 2021 Operating activities Net income $ 254 $ 639 Adjustments to reconcile net income to net cash (used in) provided by operating activities: Depreciation and amortization 608 631 Share-based compensation 37 35 Deferred income taxes (41 ) (103 ) Loss on extinguishment of debt — 201 Non-cash lease expense 81 107 Other non-cash expenses 12 10 Changes in operating assets and liabilities: Merchandise inventories (1,802 ) (1,044 ) Other current and long-term assets 102 574 Accounts payable 331 659 Accrued and other long-term liabilities 76 172 Operating lease liabilities (83 ) (107 ) Net cash (used in) provided by operating activities (425 ) 1,774 Investing activities Acquisition of property and equipment (733 ) (426 ) Proceeds from sale of real estate 31 35 Net cash used in investing activities (702 ) (391 ) Financing activities Proceeds from issuance of debt — 500 Net borrowings under revolving credit facility 668 — Deferred financing costs — (8 ) Treasury stock purchases (658 ) (807 ) Shares withheld for taxes on vested restricted shares (21 ) (26 ) Dividends paid (184 ) (114 ) Reduction of long-term borrowings — (1,044 ) Premium paid on redemption of debt — (192 ) Finance lease and financing obligation payments (81 ) (96 ) Proceeds from financing obligations 9 8 Proceeds from stock option exercises 1 1 Other — (3 ) Net cash used in financing activities (266 ) (1,781 ) Net decrease in cash and cash equivalents (1,393 ) (398 ) Cash and cash equivalents at beginning of period 1,587 2,271 Cash and cash equivalents at end of period $ 194 $ 1,873 View source version on businesswire.com: https://www.businesswire.com/news/home/20221117005168/en/ Investor Relations: Media: Source: Kohl’s
Given the recent volatility in business trends, the significant macroeconomic headwinds, along with the unexpected CEO transition, the Company will not be providing guidance for the fourth quarter, and therefore is withdrawing its prior full year 2022 guidance.
On November 2, 2022, the Company’s $500 million accelerated share repurchase agreement (ASR) was completed, with final settlement occurring on November 7, 2022. In total, the Company received 17.9 million shares, including 11.8 million shares in the third quarter and the remaining 6.1 million shares in the fourth quarter.
As previously announced, on November 9, 2022, Kohl’s Board of Directors declared a quarterly cash dividend on the Company’s common stock of $0.50 per share. The dividend is payable December 21, 2022 to shareholders of record at the close of business on December 7, 2022.
Kohl’s will host its quarterly earnings conference call at 9:00 am ET on November 17, 2022. A webcast of the conference call and the related presentation materials will be available via the Company's web site at investors.kohls.com, both live and after the call.
This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. The Company 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 the Company’s actual results to differ materially from those anticipated by the forward-looking statements. These risks and uncertainties include, but are not limited to, risks described more fully in Item 1A in the Company’s Annual Report on Form 10-K and Item 1A of Part II of the Company’s Quarterly Report on Form 10-Q for the first quarter of fiscal 2022, which are expressly incorporated herein by reference, and other factors as may periodically be described in the Company’s filings with the SEC. Forward-looking statements relate to the date initially made, and Kohl’s undertakes no obligation to update them.
Kohl’s (NYSE: KSS) is a leading omnichannel retailer. With more than 1,100 stores in 49 states and the online convenience of Kohls.com and the Kohl's App, Kohl's offers amazing national and exclusive brands at incredible savings for families nationwide. Kohl’s is uniquely positioned to deliver against its strategy and its vision to be the most trusted retailer of choice for the active and casual lifestyle.Kohl’s is committed to progress in its diversity and inclusion pledges, and the company's environmental, social, and corporate governance (ESG) stewardship. For a list of store locations or to shop online, visit Kohls.com. For more information about Kohl’s impact in the community or how to join our winning team, visit Corporate.Kohls.com or follow @KohlsNews on Twitter.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Unaudited)
CONSOLIDATED BALANCE SHEETS
(Unaudited)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Mark Rupe, (262) 703-1266, mark.rupe@kohls.com
Jen Johnson, (262) 703-5241, jen.johnson@kohls.com
* All content is copyrighted by Industry Intelligence, or the original respective author or source. You may not recirculate, redistrubte or publish the analysis and presentation included in the service without Industry Intelligence's prior written consent. Please review our terms of use.