KSS
$55.22
Kohl's
$.30
.55%
Earnings Details
3rd Quarter October 2016
Thursday, November 10, 2016 7:00:01 AM
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Summary

Kohl's Beats

Kohl's (KSS) reported 3rd Quarter October 2016 earnings of $0.80 per share on revenue of $4.3 billion. The consensus earnings estimate was $0.67 per share on revenue of $4.3 billion. The Earnings Whisper number was $0.69 per share. Revenue fell 2.3% compared to the same quarter a year ago.

The company said it continues to expect fiscal year earnings of $3.80 to $4.00 per share. The current consensus earnings estimate is $3.86 per share for the year ending January 31, 2017.

Kohl' Corp operates department stores that sell moderately priced exclusive and national brand apparel, footwear, accessories, beauty and home products.

Results
Reported Earnings
$0.80
Earnings Whisper
$0.69
Consensus Estimate
$0.67
Reported Revenue
$4.33 Bil
Revenue Estimate
$4.31 Bil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Kohl’s Corporation Reports Third Quarter Financial Results

Kohl’s Corporation (KSS) today reported results for the three and nine month periods ended October 29, 2016.

Three Months
Nine Months
($ in millions)
2016
2015
Change
2016
2015
Change
Sales
$ 4,327
$ 4,427
(2.3)%
$ 12,481
$ 12,817
(2.6)%
Comparable store sales
(1.7
)%
1.0 %
--
(2.4
)%
0.8 %
--
Gross margin
37.1
%
37.1 %
2 bp
37.4
%
37.7 %
(26) bp
Selling, general, and administrative expenses
$ 1,080
$ 1,099
(2)%
$
3,074
$
3,120
(1)%
Reported
Net income
$
146
$
120
22%
$
303
$
377
(20)%
Diluted earnings per share
$
0.83
$
0.63
32%
$
1.68
$
1.92
(13)%
Excluding Non-Recurring Items
Net income
$
142
$
144
(1)%
$
420
$
484
(13)%
Diluted earnings per share
$
0.80
$
0.75
7%
$
2.33
$
2.46
(5)%

Kevin Mansell, Kohl’s chairman, chief executive officer and president, said, "We are pleased to see continued improvement in our sales trends. Our back-to-school season was strong, followed by a soft September, and progressive improvement throughout October. We are encouraged by these trends as we enter the Holiday season. Our teams did an excellent job managing inventory. Expenses were also well-controlled as substantially all teams outperformed their plans."

Capital Structure

On November 9, 2016, the 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, 2016 to shareholders of record at the close of business on December 7, 2016.

Kohl’s Board of Directors also increased the Company’s outstanding share purchase authorization under its existing share repurchase program to $2.0 billion. Kohl’s expects to repurchase shares in open market transactions, subject to market conditions, over the next three years.

Store Update

Kohl’s ended the quarter with 1,155 Kohl’s stores, 12 FILA Outlet stores, and three Off/Aisle clearance centers in 49 states, compared with 1,166 Kohl’s stores at the same time last year.

Earnings Guidance Update

The company reaffirmed its prior fiscal 2016 diluted earnings per share guidance of $3.12 to $3.32 per diluted share. Excluding impairments, store closing and other costs, fiscal 2016 diluted earnings per share is expected to be $3.80 to $4.00.

Third Quarter 2016 Earnings Conference Call

Kohl’s will host its quarterly earnings conference call at 8:30 am ET on November 10, 2016. The phone number for the conference call is (800) 230-1074. 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 386530. The conference call and replays are also accessible via the Company’s web site at http://corporate.kohls.com/investors/events-and-presentations.

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 cause Kohl’s actual 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 in Kohl’s filings with the SEC.

About Kohl’s

Kohl’s (KSS) is a leading specialty department store with more than 1,100 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, online at Kohls.com and via mobile devices. Committed to its communities, Kohl’s has raised nearly $300 million for children’s initiatives nationwide through its Kohl’s Cares(R) 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, visit www.Kohls.com/Cares. For a list of store locations and information, or for the added convenience of shopping online, visit www.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)

YouTube (http://www.youtube.com/Kohls)

KOHL’S CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(In Millions, except per share data)
(Unaudited)
Three Months Ended
Nine Months Ended
October 29,
October 31,
October 29,
October 31,
2016
2015
2016
2015
Net sales
$
4,327
$
4,427
$
12,481
$
12,817
Cost of merchandise sold
2,720
2,784
7,812
7,990
Gross margin
1,607
1,643
4,669
4,827
Operating expenses:
Selling, general, and administrative
1,080
1,099
3,074
3,120
Depreciation and amortization
232
236
700
695
Impairments, store closing and other costs
(6 )
--
186
--
Operating income
301
308
709
1,012
Interest expense, net
76
81
233
248
Loss on extinguishment of debt
--
38
--
169
Income before income taxes
225
189
476
595
Provision for income taxes
79
69
173
218
Net income
$
146
$
120
$
303
$
377
Basic net income per share
$
0.82
$
0.63
$
1.68
$
1.93
Average number of shares
177
191
180
196
Diluted net income per share
$
0.83
$
0.63
$
1.68
$
1.92
Average number of shares
177
192
180
197
As a percent of net sales:
Gross margin
37.1 %
37.1 %
37.4 %
37.7 %
Selling, general and administrative expenses
25.0 %
24.8 %
24.6 %
24.3 %
Operating income
7.0 %
7.0 %
5.7 %
7.9 %
Net income
3.4 %
2.7 %
2.4 %
2.9 %
Excluding non-recurring items*
Net income
$
142
$
144
$
420
$
484
Diluted net income per share
$
0.80
$
0.75
$
2.33
$
2.46
As a percent of net sales:
Operating income
6.8 %
7.0 %
7.2 %
7.9 %
Net income
3.3 %
3.3 %
3.4 %
3.8 %
*Excludes impairments, store closing and other costs in 2016 and
Loss on extinguishment of debt in 2015.
KOHL’S CORPORATION
CONSOLIDATED BALANCE SHEETS
(In Millions)
(Unaudited)
October 29,
October 31,
2016
2015
Assets
Current assets:
Cash and cash equivalents
$
597
$
501
Merchandise inventories
4,721
5,254
Other
336
312
Total current assets
5,654
6,067
Property and equipment, net
8,203
8,499
Other assets
219
228
Total assets
$
14,076
$
14,794
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable
$
2,097
$
2,141
Accrued liabilities
1,235
1,244
Income taxes payable
66
28
Short-term debt
--
400
Current portion of capital lease
and financing obligations
128
126
Total current liabilities
3,526
3,939
Long-term debt
2,794
2,792
Capital lease and financing obligations
1,702
1,817
Deferred income taxes
298
216
Other long-term liabilities
649
556
Shareholders’ equity
5,107
5,474
Total liabilities and shareholders’ equity
$
14,076
$
14,794
KOHL’S CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Millions)
(Unaudited)
Nine Months Ended
October 29,
October 31,
2016
2015
Operating activities
Net income
$
303
$
377
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization
700
695
Share-based compensation
31
36
Excess tax benefits from share-based compensation
(4 )
(10 )
Deferred income taxes
40
(84 )
Loss on extinguishment of debt
--
169
Impairments, store closing and other costs
57
--
Other non-cash revenues and expenses
20
23
Changes in operating assets and liabilities:
Merchandise inventories
(679 )
(1,433 )
Other current and long-term assets
20
74
Accounts payable
846
630
Accrued and other long-term liabilities
23
(6 )
Income taxes
(77 )
(64 )
Net cash provided by operating activities
1,280
407
Investing activities
Acquisition of property and equipment
(591 )
(551 )
Other
7
3
Net cash used in investing activities
(584 )
(548 )
Financing activities
Treasury stock purchases
(441 )
(789 )
Shares withheld for taxes on vested restricted shares
(15 )
(26 )
Dividends paid
(270 )
(264 )
Proceeds from issuance of debt, net
--
1,088
Net borrowings under credit facilities
--
400
Reduction of long-term borrowings
--
(1,085 )
Premium paid on redemption of debt
--
(163 )
Capital lease and financing obligation payments
(95 )
(83 )
Proceeds from stock option exercises
6
146
Excess tax benefits from share-based compensation
4
10
Proceeds from financing obligations
5
1
Net cash used in financing activities
(806 )
(765 )
Net decrease in cash and cash equivalents
(110 )
(906 )
Cash and cash equivalents at beginning of period
707
1,407
Cash and cash equivalents at end of period
$
597
$
501

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SOURCE: Kohl’s Corporation

Kohl’s Corporation
Investor Relations:
Wes McDonald, Chief Financial Officer, (262) 703-1893
or
Media:
Jen Johnson, VP Corporate Communications, (262) 703-5241