KSS
$48.09
Kohl's
($3.74)
(7.22%)
Earnings Details
3rd Quarter October 2021
Thursday, November 18, 2021 7:00:00 AM
Tweet Share Watch
Summary

Kohl's Beats

Kohl's (KSS) reported 3rd Quarter October 2021 earnings of $1.65 per share on revenue of $4.6 billion. The consensus earnings estimate was $0.69 per share on revenue of $4.3 billion. The Earnings Whisper number was $0.77 per share. Revenue grew 15.6% on a year-over-year basis.

The company said it expects fiscal 2022 earnings of $7.10 to $7.30 per share on revenue of approximately $19.94 billion. The company's previous guidance was earnings of $5.80 to $6.10 per share on revenue of approximately $19.5 billion and the current consensus earnings estimate is $6.09 per share on revenue of $18.56 billion for the year ending January 31, 2022.

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

Results
Reported Earnings
$1.65
Earnings Whisper
$0.77
Consensus Estimate
$0.69
Reported Revenue
$4.60 Bil
Revenue Estimate
$4.26 Bil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Kohl's Reports Third Quarter Fiscal 2021 Financial Results

  • Third quarter net sales and earnings exceed expectations and company raises full year 2021 financial outlook
  • Third quarter net sales increase 15.5%; third quarter comparable sales increase 14.7%
  • Record third quarter diluted earnings per share of $1.65 and company raises full year 2021 guidance to $7.10 to $7.30
  • Repurchased $506 million of shares in the quarter and now plans to repurchase $1.3 billion of shares in 2021
  • Ended the quarter in a strong financial position with $1.9 billion in cash

MENOMONEE FALLS, Wis.--(BUSINESS WIRE)--Kohl’s Corporation (NYSE:KSS) today reported results for the quarter ended October 30, 2021.

 

Three Months

Nine Months

($ in millions, except per share data)

October 30,
2021

October 31,
2020

Change

October 30,
2021

October 31,
2020

Change

Total revenue

$

4,600

 

$

3,979

 

 

15.6

%

$

12,934

 

$

9,814

 

 

31.8

%

Net sales(1)

 

15.5

%

 

(13.3

)%

 

 

 

 

33.9

%

 

(25.9

)%

 

 

 

Gross margin

 

39.9

%

 

35.8

%

408 bps

 

 

40.6

%

 

30.5

%

1,005 bps

 

Selling, general, and administrative expenses

$

1,380

 

$

1,302

 

 

6.0

%

$

3,791

 

$

3,418

 

 

10.9

%

Reported

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

$

243

 

$

(12)

 

 

100

%+

$

639

 

$

(506)

 

 

100

%+

Diluted earnings (loss) per share

$

1.65

 

$

(0.08)

 

 

100

%+

$

4.19

 

$

(3.28)

 

 

100

%+

Non-GAAP(2)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted net (loss) income

$

243

 

$

2

 

 

100

%+

$

790

 

$

(532)

 

 

100

%+

Adjusted diluted (loss) earnings per share

$

1.65

 

$

0.01

 

 

100

%+

$

5.18

 

$

(3.45)

 

 

100

%+

(1)

Represents change in Net sales vs. prior year period.

(2)

Amounts shown for the three months ended October 30, 2021 are GAAP as there are no adjustments to Non-GAAP. These amounts are shown for comparability purposes. All other periods are Non- GAAP and exclude Loss on Extinguishment of debt, Impairments, store closing, and other costs, and Gain on sale of real estate if applicable.

“Our strategic efforts to transform Kohl’s into the leading destination for the active and casual lifestyle continue to build momentum. We delivered another quarter of record earnings with both sales and margins exceeding expectations. During the quarter, we drove accelerated growth in Active and successfully launched several new brand partnerships, including the initial rollout of 200 Sephora at Kohl’s stores, which are off to a great start,” said Michelle Gass, Kohl’s chief executive officer.

“All of the pieces of our strategy are coming together and we remain incredibly confident in the future of our business. We are raising our full year 2021 guidance and continue to accelerate our share repurchase activity, reinforcing our commitment to driving shareholder value,” said Gass.

Updated 2021 Financial Outlook

The Company is raising its full year 2021 financial outlook to include the following:

  • Net sales is now expected to increase in the mid-twenties percentage range compared to the previous expectation of low-twenties percentage range increase
  • Operating margin is now expected to be in the range of 8.4% to 8.5% compared to the previous expectation of 7.4% to 7.6%
  • Adjusted earnings per share is now expected to be in the range of $7.10 to $7.30, excluding any non-recurring charges, compared to the previous expectation of $5.80 to $6.10

Dividend

As previously announced, on November 10, 2021, Kohl’s Board of Directors declared a quarterly cash dividend on the Company’s common stock of $0.25 per share. The dividend is payable December 22, 2021 to shareholders of record at the close of business on December 8, 2021.

Third Quarter 2021 Earnings Conference Call

Kohl’s will host its quarterly earnings conference call at 9:00 am ET on November 18, 2021. 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.

Cautionary Statement Regarding Forward-Looking Information and Non-GAAP Measures

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, which is 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.

In this press release, the Company provides information regarding adjusted net income (loss) and adjusted diluted earnings (loss) 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 (loss) and adjusted diluted earnings (loss) 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 (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.

KOHL’S CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 

 

Three Months Ended

Nine Months Ended

(Dollars in Millions, Except per Share Data)

October 30,
2021

October 31,
2020

October 30,
2021

October 31,
2020

Net sales

$

4,366

 

$

3,779

 

$

12,251

 

$

9,152

 

Other revenue

 

234

 

 

200

 

 

683

 

 

662

 

Total revenue

 

4,600

 

 

3,979

 

 

12,934

 

 

9,814

 

Cost of merchandise sold

 

2,623

 

 

2,424

 

 

7,282

 

 

6,360

 

Gross margin rate

 

39.9

%

 

35.8

%

 

40.6

%

 

30.5

%

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general, and administrative

 

1,380

 

 

1,302

 

 

3,791

 

 

3,418

 

As a percent of total revenue

 

30.0

%

 

32.7

%

 

29.3

%

 

34.8

%

Depreciation and amortization

 

210

 

 

210

 

 

631

 

 

656

 

Impairments, store closing, and other

 

 

 

21

 

 

 

 

85

 

(Gain) on sale of real estate

 

 

 

 

 

 

 

(127

)

Operating income (loss)

 

387

 

 

22

 

 

1,230

 

 

(578

)

Interest expense, net

 

66

 

 

78

 

 

195

 

 

214

 

Loss on extinguishment of debt

 

 

 

 

 

201

 

 

 

Income (loss) before income taxes

 

321

 

 

(56

)

 

834

 

 

(792

)

Provision (benefit) for income taxes

 

78

 

 

(44

)

 

195

 

 

(286

)

Net income (loss)

$

243

 

$

(12

)

$

639

 

$

(506

)

Average number of shares:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

145

 

 

154

 

 

151

 

 

154

 

Diluted

 

147

 

 

154

 

 

153

 

 

154

 

Earnings (loss) per share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

$

1.67

 

$

(0.08

)

$

4.24

 

$

(3.28

)

Diluted

$

1.65

 

$

(0.08

)

$

4.19

 

$

(3.28

)

 

ADJUSTED NET INCOME (LOSS) AND DILUTED EARNINGS (LOSS) PER SHARE, NON-GAAP FINANCIAL MEASURES

(Unaudited)

 

 

Three Months Ended

Nine Months Ended

(Dollars in Millions, Except per Share Data)

October 30,
2021

October 31,
2020

October 30,
2021

October 31,
2020

Net income (loss)

 

 

 

 

 

 

 

 

GAAP

$

243

$

(12

)

$

639

 

$

(506

)

Impairments, store closing, and other

 

 

21

 

 

 

 

85

 

(Gain) on sale of real estate

 

 

 

 

 

 

(127

)

Loss on extinguishment of debt

 

 

 

 

201

 

 

 

Income tax impact of items noted above

 

 

(7

)

 

(50

)

 

16

 

Adjusted (non-GAAP)(1)

$

243

$

2

 

$

790

 

$

(532

)

Diluted earnings (loss) per share

 

 

 

 

 

 

 

 

GAAP(2)

$

1.65

$

(0.08

)

$

4.19

 

$

(3.28

)

Impairments, store closing, and other

 

 

0.14

 

 

 

 

0.55

 

(Gain) on sale of real estate

 

 

 

 

 

 

(0.82

)

Loss on extinguishment of debt

 

 

 

 

1.32

 

 

 

Income tax impact of items noted above

 

 

(0.05

)

 

(0.33

)

 

0.10

 

Adjusted (non-GAAP)(1)(3)

$

1.65

$

0.01

 

$

5.18

 

$

(3.45

)

(1)

Amounts shown for the three months ended October 30, 2021 are GAAP as there are no adjustments to Non-GAAP. These amounts are shown for comparability purposes. All other periods are Non- GAAP and exclude Loss on Extinguishment of debt, Impairments, store closing, and other costs, and Gain on sale of real estate if applicable.

(2)

Weighted average diluted shares outstanding for purposes of calculating diluted adjusted (loss) earnings per share for the three months ended October 31, 2020 was 154 million as the effect of including dilutive shares would be antidilutive.

(3)

Weighted average diluted shares outstanding for purpose of calculating diluted earnings per share for the three months ended October 31, 2020 was 155 million, which includes the dilutive effect of share-based awards as determined under the treasury stock method.

KOHL’S CORPORATION

CONSOLIDATED BALANCE SHEETS

(Unaudited)

 

(Dollars in Millions)

October 30,
2021

October 31,
2020

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

$

1,873

 

$

1,939

 

Merchandise inventories

 

3,642

 

 

3,607

 

Other

 

373

 

 

450

 

Total current assets

 

5,888

 

 

5,996

 

Property and equipment, net

 

7,329

 

 

6,876

 

Operating leases

 

2,293

 

 

2,422

 

Other assets

 

441

 

 

150

 

Total assets

$

15,951

 

$

15,444

 

Liabilities and Shareholders' Equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

$

2,135

 

$

2,184

 

Accrued liabilities

 

1,545

 

 

1,272

 

Current portion of:

 

 

 

 

 

 

Finance leases and financing obligations

 

117

 

 

127

 

Operating leases

 

142

 

 

160

 

Total current liabilities

 

3,939

 

 

3,743

 

Long-term debt

 

1,909

 

 

2,450

 

Finance leases and financing obligations

 

2,072

 

 

1,402

 

Operating leases

 

2,537

 

 

2,644

 

Deferred income taxes

 

196

 

 

74

 

Other long-term liabilities

 

367

 

 

293

 

Shareholders' equity

 

4,931

 

 

4,838

 

Total liabilities and shareholders' equity

$

15,951

 

$

15,444

 

KOHL’S CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

 

Nine Months Ended

(Dollars in Millions)

October 30,
2021

October 31,
2020

Operating activities

 

 

 

 

 

 

Net income (loss)

$

639

 

$

(506

)

Adjustments to reconcile net income (loss) to net cash provided

by operating activities:

 

 

 

 

 

 

Depreciation and amortization

 

631

 

 

656

 

Share-based compensation

 

35

 

 

26

 

Deferred income taxes

 

(103

)

 

(181

)

Impairments, store closing, and other costs

 

 

 

49

 

(Gain) on sale of real estate

 

 

 

(127

)

Loss on extinguishment of debt

 

201

 

 

 

Non-cash inventory costs

 

 

 

187

 

Non-cash lease expense

 

107

 

 

111

 

Other non-cash expenses

 

10

 

 

15

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

Merchandise inventories

 

(1,044)

 

 

(251)

 

Other current and long-term assets

 

574

 

 

(45)

 

Accounts payable

 

659

 

 

978

 

Accrued and other long-term liabilities

 

172

 

 

111

 

Operating lease liabilities

 

(107

)

 

(113

)

Net cash provided by operating activities

 

1,774

 

 

910

 

Investing activities

 

 

 

 

 

 

Acquisition of property and equipment

 

(426

)

 

(264

)

Proceeds from sale of real estate

 

35

 

 

194

 

Net cash used in investing activities

 

(391

)

 

(70

)

Financing activities

 

 

 

 

 

 

Proceeds from issuance of debt

 

500

 

 

2,097

 

Deferred financing costs

 

(8

)

 

(19

)

Treasury stock purchases

 

(807

)

 

(8

)

Shares withheld for taxes on vested restricted shares

 

(26

)

 

(21

)

Dividends paid

 

(114

)

 

(108

)

Reduction of long-term borrowings

 

(1,044

)

 

(1,497

)

Premium paid on redemption of debt

 

(192

)

 

 

Finance lease and financing obligation payments

 

(96

)

 

(72

)

Proceeds from financing obligations

 

8

 

 

4

 

Proceeds from stock option exercises

 

1

 

 

 

Other

 

(3)

 

 

 

Net cash provided by (used in) financing activities

 

(1,781)

 

 

376

 

Net increase (decrease) in cash and cash equivalents

 

(398)

 

 

1,216

 

Cash and cash equivalents at beginning of period

 

2,271

 

 

723

 

Cash and cash equivalents at end of period

$

1,873

 

$

1,939

 

 

Investor Relations:
Mark Rupe, (262) 703-1266, mark.rupe@kohls.com

Media:
Jen Johnson, (262) 703-5241, jen.johnson@kohls.com

Source: Kohl’s