KOHLS Corp false 0000885639 0000885639 2023-11-21 2023-11-21

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): November 21, 2023

 

 

KOHL’S CORP

(Exact name of Registrant as Specified in Its Charter)

 

 

 

Wisconsin   001-11084   39-1630919
(State or Other Jurisdiction
of Incorporation)
 

(Commission

File Number)

  (IRS Employer
Identification No.)
N56 W17000 Ridgewood Drive  
Menomonee Falls, Wisconsin     53051
(Address of Principal Executive Offices)     (Zip Code)

Registrant’s Telephone Number, Including Area Code: 262 703-7000

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

 


Title of each class

 

Trading
Symbol(s)

 

Name of each exchange

on which registered

Common Stock, $.01 par value   KSS   New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company  

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

 

 

 


Item 2.02

Results of Operations and Financial Condition.

On November 21, 2023, Kohl’s Corporation (the “Company”) issued a press release reporting its earnings for the quarter ended October 28, 2023 and provided earnings guidance for fiscal 2023. A copy of the press release is attached as Exhibit 99.1 and incorporated by reference herein. A copy of the presentation materials for the November 21, 2023 quarterly earnings conference call is attached as Exhibit 99.2 and incorporated by reference herein.

 

Item 7.01

Regulation FD Disclosure.

See Item 2.02.

The information in Items 2.02 and 7.01, including the exhibits attached hereto, is furnished solely pursuant to Items 2.02 and 7.01 of Form 8-K. Consequently, such information is not deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liabilities of that section. Further, the information in Items 2.02 and 7.01, including the exhibits, shall not be deemed to be incorporated by reference into the filings of the registrant under the Securities Act of 1933.

 

Item 8.01

Other Events.

As previously announced, on November 7, 2023, the Board of Directors of the Company declared a quarterly cash dividend of $0.50 per share. The dividend will be paid on December 20, 2023, to all shareholders of record at the close of business on December 6, 2023.

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,” “intends,” “anticipates,” “plans,” or similar expressions to identify forward-looking statements. Forward-looking statements include the information under “2023 Financial and Capital Allocation Outlook.” 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 the Company undertakes no obligation to update them.

In the attached presentation materials, the Company provides information regarding free cash flow, which is not a recognized term under U.S. generally accepted accounting principles (“GAAP”) and does not purport to be an alternative to net income as a measure of operating performance. A reconciliation of free cash flow is provided in the presentation materials attached hereto as Exhibit 99.2. The Company believes that the use of this non-GAAP financial measure provides investors with enhanced visibility into its results with respect to the impact of certain costs. Because not all companies use identical calculations, this presentation may not be comparable to other similarly titled measures of other companies.

 

Item 9.01

Financial Statements and Exhibits.

 

Exhibit
No.

  

Description

99.1    Press Release dated November 21, 2023
99.2    Presentation Materials for November 21, 2023 Quarterly Earnings Conference Call
104    Cover Page Interactive Data File (embedded within the Inline XBRL document)

 


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

      KOHL’S CORPORATION
Date: November 21, 2023     By:  

/s/ Jennifer Kent

      Jennifer Kent
Senior Executive Vice President,
Chief Legal Officer and Corporate Secretary

Exhibit 99.1

Kohl’s Reports Third Quarter Fiscal 2023 Financial Results

MENOMONEE FALLS, Wis.—(BUSINESS WIRE)—November 21, 2023— Kohl’s Corporation (NYSE:KSS) today reported results for the third quarter ended October 28, 2023.

 

   

Net sales decreased 5.2% and comparable sales decreased 5.5%

 

   

Diluted earnings per share of $0.53

 

   

Inventory declined 13%

 

   

Updates full year 2023 diluted earnings per share guidance to $2.30 to $2.70

 

   

Remains committed to strengthening balance sheet and to maintaining current dividend

Tom Kingsbury, Kohl’s chief executive officer, said “Kohl’s third quarter earnings reflect strong gross margin and expense management as well as additional progress against our strategic priorities. I am pleased with our store performance driven by strong growth in Sephora and the newness in our home and gifting initiatives. This reinforces our actions are working and resonating with our customers. In addition, we drove a 13% reduction in inventory as we benefited from our new disciplines.”

“Our strategies to reposition Kohl’s for improved sales and earnings performance remain in the early stages. The work we have done in 2023 will continue to build momentum and set us up to be successful in 2024. I continue to be impressed with the entire Kohl’s team for their hard work and agility in executing against our strategic priorities in 2023,” Kingsbury continued.

Third Quarter 2023 Results

Comparisons refer to the 13-week period ended October 28, 2023 versus the 13-week period ended October 29, 2022

 

   

Net sales decreased 5.2% year-over-year, to $3.8 billion, with comparable sales down 5.5%.

 

   

Gross margin as a percentage of net sales was 38.9%, an increase of 158 basis points.

 

   

Selling, general & administrative (SG&A) expenses increased 1.9% year-over-year, to $1.4 billion. As a percentage of total revenue, SG&A expenses were 33.5%, an increase of 235 basis points year-over-year.

 

   

Operating income was $157 million compared to $200 million in the prior year. As a percentage of total revenue, operating income was 3.9%, a decrease of 82 basis points year-over-year.

 

   

Net income was $59 million, or $0.53 per diluted share. This compares to net income of $97 million, or $0.82 per diluted share in the prior year.

 

   

Inventory was $4.2 billion, a decrease of 13% year-over-year.

 

   

Operating cash flow was $151 million.

Nine Months Fiscal Year 2023 Results

Comparisons refer to the 39-week period ended October 28, 2023 versus the 39-week period ended October 29, 2022

 

   

Net sales decreased 4.5% year-over-year, to $10.9 billion, with comparable sales down 5.0%.

 

   

Gross margin as a percentage of net sales was 39.0%, an increase of 56 basis points.

 

   

Selling, general & administrative (SG&A) expenses decreased 0.2% year-over-year, to $3.9 billion. As a percentage of total revenue, SG&A expenses were 33.9%, an increase of 150 basis points year-over-year.

 

   

Operating income was $418 million compared to $548 million in the prior year. As a percentage of total revenue, operating income was 3.6%, a decrease of 91 basis points year-over-year.

 

   

Net income was $131 million, or $1.18 per diluted share. This compares to net income of $254 million, or $2.02 per diluted share in the prior year.

 

   

Operating cash flow was $379 million.


2023 Financial and Capital Allocation Outlook

For the full year 2023, the Company updates its financial outlook and currently expects the following:

 

   

Net sales: A decrease of (2.8%) to (4%), includes the impact of the 53rd week which is worth approximately 1% year-over-year. This compares to the Company’s prior guidance of a decrease of (2%) to (4%).

 

   

Operating margin: Approximately 4.0%, which is consistent with the Company’s prior guidance.

 

   

Diluted earnings per share: In the range of $2.30 to $2.70, excluding any non-recurring charges. This compares to the Company’s prior guidance range of $2.10 to $2.70.

 

   

Capital Expenditures: Towards the lower end of $600 million to $650 million, including expansion of its Sephora partnership and store refresh activity.

 

   

Dividend: On November 7, 2023, 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 20, 2023 to shareholders of record at the close of business on December 6, 2023.

Third Quarter 2023 Earnings Conference Call

Kohl’s will host its quarterly earnings conference call at 9:00 am ET on November 21, 2023. 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

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. Forward-looking statements include the information under “2023 Financial and Capital Allocation Outlook.” 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 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 the Company undertakes no obligation to update them.    

About Kohl’s

Kohl’s (NYSE: KSS) is a leading omnichannel retailer built on a foundation that combines great brands, incredible value and convenience for our customers. Kohl’s serves millions of families in our more than 1,100 stores in 49 states, online at Kohls.com, and through our Kohl’s App. 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.

Contacts

Investor Relations:

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

Media:

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


KOHL’S CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 

     Three Months Ended     Nine Months Ended  

(Dollars in Millions, Except per Share Data)

   October 28, 2023     October 29, 2022     October 28, 2023     October 29, 2022  

Net sales

   $ 3,843     $ 4,052     $ 10,876     $ 11,386  

Other revenue

     211       225       644       693  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total revenue

     4,054       4,277       11,520       12,079  

Cost of merchandise sold

     2,349       2,541       6,638       7,013  

Gross margin rate

     38.9     37.3     39.0     38.4

Operating expenses:

        

Selling, general, and administrative

     1,360       1,334       3,902       3,910  

As a percent of total revenue

     33.5     31.2     33.9     32.4

Depreciation and amortization

     188       202       562       608  
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating income

     157       200       418       548  

Interest expense, net

     89       81       262       226  
  

 

 

   

 

 

   

 

 

   

 

 

 

Income before income taxes

     68       119       156       322  

Provision for income taxes

     9       22       25       68  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income

   $ 59     $ 97     $ 131     $ 254  
  

 

 

   

 

 

   

 

 

   

 

 

 

Average number of shares:

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

     110       118       110       124  

Diluted

     111       119       111       126  

Earnings per share:

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

   $ 0.54     $ 0.82     $ 1.19     $ 2.05  

Diluted

   $ 0.53     $ 0.82     $ 1.18     $ 2.02  
  

 

 

   

 

 

   

 

 

   

 

 

 


KOHL’S CORPORATION

CONSOLIDATED BALANCE SHEETS

(Unaudited)

 

(Dollars in Millions)

   October 28, 2023      October 29, 2022  

Assets

  

 

 

 

  

 

 

 

Current assets:

     

Cash and cash equivalents

   $ 190      $ 194  

Merchandise inventories

     4,239        4,874  

Other

     291        366  
  

 

 

    

 

 

 

Total current assets

     4,720        5,434  

Property and equipment, net

     7,861        8,117  

Operating leases

     2,492        2,318  

Other assets

     394        365  
  

 

 

    

 

 

 

Total assets

   $ 15,467      $ 16,234  
  

 

 

    

 

 

 

Liabilities and Shareholders’ Equity

  

 

 

 

  

 

 

 

Current liabilities:

     

Accounts payable

   $ 1,918      $ 2,014  

Accrued liabilities

     1,324        1,436  

Borrowings under revolving credit facility

     625        668  

Current portion of:

     

Long-term debt

     111        164  

Finance leases and financing obligations

     84        95  

Operating leases

     94        109  
  

 

 

    

 

 

 

Total current liabilities

     4,156        4,486  

Long-term debt

     1,638        1,747  

Finance leases and financing obligations

     2,714        2,791  

Operating leases

     2,780        2,595  

Deferred income taxes

     107        165  

Other long-term liabilities

     321        354  

Shareholders’ equity:

     3,751        4,096  

Total liabilities and shareholders’ equity

   $ 15,467      $ 16,234  
  

 

 

    

 

 

 


KOHL’S CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

     Nine Months Ended  

(Dollars in Millions)

   October 28, 2023     October 29, 2022  

Operating activities

  

 

 

 

 

 

 

 

Net income

   $ 131     $ 254  

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

    

Depreciation and amortization

     562       608  

Share-based compensation

     31       37  

Deferred income taxes

     (25     (41

Non-cash lease expense

     70       81  

Other non-cash items

     13       12  

Changes in operating assets and liabilities:

    

Merchandise inventories

     (1,046     (1,802

Other current and long-term assets

     66       102  

Accounts payable

     588       331  

Accrued and other long-term liabilities

     58       76  

Operating lease liabilities

     (69     (83
  

 

 

   

 

 

 

Net cash provided by (used in) operating activities

     379       (425
  

 

 

   

 

 

 

Investing activities

  

 

 

 

 

 

 

 

Acquisition of property and equipment

     (495     (733

Proceeds from sale of real estate

     15       31  

Other

     (11     —    
  

 

 

   

 

 

 

Net cash used in investing activities

     (491     (702
  

 

 

   

 

 

 

Financing activities

  

 

 

 

 

 

 

 

Net borrowings under revolving credit facility

     540       668  

Treasury stock purchases

     —         (658

Shares withheld for taxes on vested restricted shares

     (13     (21

Dividends paid

     (165     (184

Repayment of long-term borrowings

     (164     —    

Finance lease and financing obligation payments

     (68     (81

Proceeds from financing obligations

     19       9  

Proceeds from stock option exercises

     —         1  
  

 

 

   

 

 

 

Net cash provided by (used in) financing activities

     149       (266
  

 

 

   

 

 

 

Net increase (decrease) in cash and cash equivalents

     37       (1,393

Cash and cash equivalents at beginning of period

     153       1,587  
  

 

 

   

 

 

 

Cash and cash equivalents at end of period

   $ 190     $ 194  
  

 

 

   

 

 

 

Exhibit 99.2 Kids uniform Men’s Nike image footwear image



11 16


tightly. strong growth and the newness in our home decor and gifting initiatives and set us up to be successful in 2024


New image





Focus on stores driving improved performance ● Re-established stores as a key focal point of our strategy ● New leadership focused on driving increased store productivity ● Investments in improved merchandising and enhanced customer experience ● Favorable customer response to date from our efforts Q3 2023 YTD 2023 Store comparable Store comparable sales ~(1%) vs. last sales slightly positive year vs. last year


900 Sephora shops by year end 2023



(2.8%) (3%) to (4%) vs. 2022, includes a 1% benefit from the 53rd week A few of these 4 Approx. 4.0% images are summer apparel - probably makes sense to update for seasonal $2.30 $2.70 $2.20 to $2.60 Replace with fall apparel image Diluted






Pleased with store performance driven by strong growth in Sephora and the newness in our home decor and gifting initiatives


$0.82 January 28, 2023 Twelve Months Ended





Update images - Holiday theme

v3.23.3
Document and Entity Information
Nov. 21, 2023
Cover [Abstract]  
Entity Registrant Name KOHLS Corp
Amendment Flag false
Entity Central Index Key 0000885639
Document Type 8-K
Document Period End Date Nov. 21, 2023
Entity Incorporation State Country Code WI
Entity File Number 001-11084
Entity Tax Identification Number 39-1630919
Entity Address, Address Line One N56 W17000 Ridgewood Drive
Entity Address, City or Town Menomonee Falls
Entity Address, State or Province WI
Entity Address, Postal Zip Code 53051
City Area Code 262
Local Phone Number 703-7000
Written Communications false
Soliciting Material false
Pre Commencement Tender Offer false
Pre Commencement Issuer Tender Offer false
Security 12b Title Common Stock, $.01 par value
Trading Symbol KSS
Security Exchange Name NYSE
Entity Emerging Growth Company false

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