KSS
$19.09
Kohl's
$.56
3.02%
Earnings Details
2nd Quarter July 2020
Tuesday, August 18, 2020 7:00:00 AM
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Summary

Kohl's Beats

Kohl's (KSS) reported a 2nd Quarter July 2020 loss of $0.25 per share on revenue of $3.4 billion. The consensus estimate was a loss of $0.92 per share on revenue of $3.1 billion. The Earnings Whisper number was for a loss of $0.81 per share. Revenue fell 23.1% compared to the same quarter a year ago.

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

Results
Reported Earnings
($0.25)
Earnings Whisper
($0.81)
Consensus Estimate
($0.92)
Reported Revenue
$3.41 Bil
Revenue Estimate
$3.05 Bil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Kohl's Corporation Reports Financial Results

  • Strengthened financial position during the quarter, ending with $2.4 billion in cash
  • Disciplined management of expenses and inventory resulted in positive operating cash flow
  • Second quarter net sales decrease (22.9%)
  • Second quarter diluted earnings per share of $0.30; adjusted loss per share(2) of ($0.25)

MENOMONEE FALLS, Wis.--(BUSINESS WIRE)--Kohl’s Corporation (NYSE:KSS) today reported results for the quarter ended August 1, 2020.

 

Three Months

Six Months

($ in millions, except per share data)

August 1,
2020

August 3,
2019

Change

August 1,
2020

August 3,
2019

Change

Total revenue

$

3,407

 

$

4,430

 

 

(23.1

)%

$

5,835

 

$

8,517

 

 

(31.5

)%

Net sales(1)

 

(22.9

)%

 

(3.3

)%

 

 

 

 

(32.8

)%

 

(3.3

)%

 

 

 

Gross margin

 

33.1

%

 

38.8

%

(569) bps

 

 

26.8

%

 

37.9

%

(1,109) bps

 

Selling, general, and administrative expenses

$

1,050

 

$

1,269

 

 

(17.3

)%

$

2,116

 

$

2,544

 

 

(16.8

)%

Reported

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

$

47

 

$

241

 

 

(80

)%

$

(494

)

$

303

 

 

(263

)%

Diluted earnings (loss) per share

$

0.30

 

$

1.51

 

 

(80

)%

$

(3.21

)

$

1.89

 

 

(270

)%

Non-GAAP(2)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted net (loss) income

$

(39

)

$

247

 

 

(116

)%

$

(534

)

$

345

 

 

(255

)%

Adjusted diluted (loss) earnings per share

$

(0.25

)

$

1.55

 

 

(116

)%

$

(3.47

)

$

2.15

 

 

(261

)%

(1) Represents change in Net sales vs. prior year period. We are not reporting comparable sales due to store closures.
(2) Excludes Impairments, store closing, and other costs and Gain on sale of real estate.

"Our organization continues to navigate through a period of extraordinary change and uncertainty presented by the COVID-19 crisis. During the second quarter we made significant progress in rebuilding our business. We reopened all of our stores with new safety and operating procedures, accelerated digital growth, and showed great discipline in managing inventory and expenses meaningfully lower. In doing so, we generated positive operating cash flow and further enhanced our financial position,” said Michelle Gass, Kohl’s chief executive officer.

“As we look ahead, we are planning for the crisis to continue to impact our business in the near-term,” said Gass. “We are well-positioned to capitalize on evolving customer behaviors and the retail industry disruption, which we believe will drive long-term growth and increased market share.”

Second Quarter 2020 Earnings Conference Call
Kohl's will host its quarterly earnings conference call at 9:00 am ET on August 18, 2020. A webcast of the conference call and the related presentation materials will be available via the Company's web site at http://corporate.kohls.com/investors/events-and-presentations, both live and after the call.

Cautionary Statement Regarding Forward-Looking Information and Non-GAAP Measures
This current report on Form 8-K 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 in Item 1A of Part II in the Company's Quarterly Report on Form 10-Q for the quarter ended May 2, 2020, 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.

In this press release, the Company provides information regarding adjusted net (loss) income and adjusted diluted (loss) 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 (loss) income and adjusted diluted (loss) 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 (NYSE: KSS) is a leading omnichannel retailer with more than 1,100 stores in 49 states. With a commitment to inspiring and empowering families to lead fulfilled lives, Kohl’s offers amazing?? national and exclusive brands, incredible savings and an easy shopping experience in our stores, online at Kohls.com and on Kohl's mobile app. ?Since its founding, Kohl's has given more than $750 million to support communities nationwide, with a focus on family health and wellness. 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

Six Months Ended

(Dollars in Millions, Except per Share Data)

August 1,
2020

August 3,
2019

August 1,
2020

August 3,
2019

Net sales

$

3,213

 

$

4,169

 

$

5,373

 

$

7,990

 

Other revenue

 

194

 

 

261

 

 

462

 

 

527

 

Total revenue

 

3,407

 

 

4,430

 

 

5,835

 

 

8,517

 

Cost of merchandise sold

 

2,149

 

 

2,550

 

 

3,936

 

 

4,965

 

Gross margin rate

 

33.1

%

 

38.8

%

 

26.8

%

 

37.9

%

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general, and administrative

 

1,050

 

 

1,269

 

 

2,116

 

 

2,544

 

As a percent of total revenue

 

30.8

%

 

28.6

%

 

36.3

%

 

29.9

%

Depreciation and amortization

 

219

 

 

228

 

 

446

 

 

458

 

Impairments, store closing, and other

 

(2

)

 

7

 

 

64

 

 

56

 

(Gain) on sale of real estate

 

(127

)

 

 

 

(127

)

 

 

Operating income (loss)

 

118

 

 

376

 

 

(600

)

 

494

 

Interest expense, net

 

78

 

 

53

 

 

136

 

 

105

 

Income (loss) before income taxes

 

40

 

 

323

 

 

(736

)

 

389

 

(Benefit) provision for income taxes

 

(7

)

 

82

 

 

(242

)

 

86

 

Net income (loss)

$

47

 

$

241

 

$

(494

)

$

303

 

Average number of shares:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

154

 

 

159

 

 

154

 

 

160

 

Diluted

 

155

 

 

159

 

 

154

 

 

161

 

Earnings (loss) per share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

$

0.31

 

$

1.52

 

$

(3.21

)

$

1.90

 

Diluted

$

0.30

 

$

1.51

 

$

(3.21

)

$

1.89

 

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

(Unaudited)

 

 

Three Months Ended

Six Months Ended

(Dollars in Millions, Except per Share Data)

August 1,
2020

August 3,
2019

August 1,
2020

August 3,
2019

Net income (loss)

 

 

 

 

 

 

 

 

 

 

 

 

GAAP

$

47

 

$

241

 

$

(494

)

$

303

 

Impairments, store closing, and other

 

(2

)

 

7

 

 

64

 

 

56

 

(Gain) on sale of real estate

 

(127

)

 

 

 

(127

)

 

 

Income tax impact of items noted above

 

43

 

 

(1)

 

 

23

 

 

(14)

 

Adjusted (non-GAAP)

$

(39

)

$

247

 

$

(534

)

$

345

 

Diluted (loss) earnings per share

 

 

 

 

 

 

 

 

 

 

 

 

GAAP(1)

$

0.30

 

$

1.51

 

$

(3.21

)

$

1.89

 

Impairments, store closing, and other

 

(0.01

)

 

0.05

 

 

0.41

 

 

0.35

 

(Gain) on sale of real estate

 

(0.82

)

 

 

 

(0.82

)

 

 

Income tax impact of items noted above

 

0.28

 

 

(0.01)

 

 

0.15

 

 

(0.09)

 

Adjusted (non-GAAP)(2)

$

(0.25

)

$

1.55

 

$

(3.47

)

$

2.15

 

(1) Weighted average diluted shares outstanding for purpose of calculating diluted earnings per share for the three months ended August 1, 2020 was 155 million, which includes the dilutive effect of share-based awards as determined under the treasury stock method.
(2) Weighted average diluted shares outstanding for purposes of calculating diluted adjusted (loss) earnings per share for the three months ended August 1, 2020 was 154 million as the effect of including dilutive shares would be antidilutive.

KOHL’S CORPORATION

CONSOLIDATED BALANCE SHEETS

(Unaudited)

 

(Dollars in Millions)

August 1,
2020

August 3,
2019

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

$

2,428

 

$

625

 

Merchandise inventories

 

2,698

 

 

3,656

 

Income tax receivable

 

205

 

 

16

 

Other

 

357

 

 

381

 

Total current assets

 

5,688

 

 

4,678

 

Property and equipment, net

 

6,970

 

 

7,276

 

Operating leases

 

2,418

 

 

2,428

 

Other assets

 

159

 

 

160

 

Total assets

$

15,235

 

$

14,542

 

Liabilities and Shareholders' Equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

$

1,064

 

$

1,330

 

Accrued liabilities

 

1,130

 

 

1,199

 

Income taxes payable

 

86

 

 

34

 

Current portion of:

 

 

 

 

 

 

Finance leases and financing obligations

 

126

 

 

119

 

Operating leases

 

160

 

 

158

 

Total current liabilities

 

2,566

 

 

2,840

 

Long-term debt

 

3,450

 

 

1,855

 

Finance leases and financing obligations

 

1,356

 

 

1,270

 

Operating leases

 

2,637

 

 

2,647

 

Deferred income taxes

 

122

 

 

254

 

Other long-term liabilities

 

267

 

 

221

 

Shareholders' equity

 

4,837

 

 

5,455

 

Total liabilities and shareholders' equity

$

15,235

 

$

14,542

 

KOHL’S CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

 

Six Months Ended

(Dollars in Millions)

August 1,
2020

August 3,
2019

Operating activities

 

 

 

 

 

 

Net (loss) income

$

(494

)

$

303

 

Adjustments to reconcile net (loss) income to net cash provided by operating activities:

 

 

 

 

 

 

Depreciation and amortization

 

446

 

 

458

 

Share-based compensation

 

14

 

 

27

 

Deferred income taxes

 

(132

)

 

41

 

Impairments, store closing, and other costs

 

48

 

 

45

 

(Gain) on sale of real estate

 

(127

)

 

 

Non-cash inventory costs

 

187

 

 

 

Non-cash lease expense

 

74

 

 

75

 

Other non-cash expenses

 

10

 

 

3

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

Merchandise inventories

 

656

 

 

(175

)

Other current and long-term assets

 

20

 

 

29

 

Accounts payable

 

(142

)

 

143

 

Accrued and other long-term liabilities

 

(23

)

 

(177

)

Income taxes

 

(151

)

 

(8

)

Operating lease liabilities

 

(82

)

 

(88

)

Net cash provided by operating activities

 

304

 

 

676

 

Investing activities

 

 

 

 

 

 

Acquisition of property and equipment

 

(196

)

 

(439

)

Proceeds from sale of real estate

 

193

 

 

 

Net cash used in investing activities

 

(3

)

 

(439

)

Financing activities

 

 

 

 

 

 

Proceeds from issuance of debt

 

2,097

 

 

 

Deferred financing costs

 

(19

)

 

 

Treasury stock purchases

 

(8

)

 

(254

)

Shares withheld for taxes on vested restricted shares

 

(20

)

 

(27

)

Dividends paid

 

(108

)

 

(214

)

Reduction of long-term borrowings

 

(497

)

 

(6

)

Finance lease and financing obligation payments

 

(44

)

 

(60

)

Proceeds from stock option exercises

 

 

 

2

 

Proceeds from financing obligations

 

3

 

 

13

 

Net cash provided by (used in) financing activities

 

1,404

 

 

(546

)

Net increase (decrease) in cash and cash equivalents

 

1,705

 

 

(309

)

Cash and cash equivalents at beginning of period

 

723

 

 

934

 

Cash and cash equivalents at end of period

$

2,428

 

$

625

 

 

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

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

Source: Kohl’s Corporation