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Kohl's Corporation Reports Third Quarter Financial Results

About Kohl's

Based in Menomonee Falls, Wis., Kohl’s (NYSE: KSS) is a family-focused, value-oriented specialty department store offering moderately priced, exclusive and national brand apparel, shoes, accessories, beauty and home products in an exciting shopping environment. With a commitment to environmental leadership, Kohl’s operates 1,158 stores in 49 states. In support of the communities it serves, Kohl’s has raised more than $231 million for children’s initiatives nationwide through its Kohl’s Cares® cause merchandise program, which operates under Kohl's Cares, LLC, a wholly-owned subsidiary of Kohl's Department Stores, Inc. For a list of store locations and information, or for the added convenience of shopping online, visit www.Kohls.com, join the discussion on Facebook ( http://www.facebook.com/kohls) or Twitter ( http://twitter.com/Kohls) or get inspired on Pinterest ( http://pinterest.com/kohls/) and Instagram ( http://instagram.com/kohls).
 
KOHL'S CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(In Millions, except per share data)
(Unaudited)
       
Three Months Ended Nine Months Ended
November 2, October 27, November 2, October 27,
2013 2012 2013 2012
Net sales $ 4,444 $ 4,490 $ 12,932 $ 12,937
Cost of merchandise sold 2,778   2,778   8,063   8,059  
 
Gross margin 1,666 1,712 4,869 4,878
 
Operating expenses:
Selling, general, and administrative 1,073 1,077 3,071 3,055
Depreciation and amortization 228   210   665   620  
 
Operating income 365 425 1,133 1,203
 
Interest expense, net 84   80   251   243  
 
Income before income taxes 281 345 882 960
Provision for income taxes 104   130   327   351  
 
Net income $ 177   $ 215   $ 555   $ 609  
 
Basic net income per share $ 0.82 $ 0.92 $ 2.53 $ 2.56
Average number of shares 216 233 219 238
 
Diluted net income per share $ 0.81 $ 0.91 $ 2.51 $ 2.54
Average number of shares 218 235 221 240
 
As a percent of net sales:
Gross margin 37.5 % 38.1 % 37.7 % 37.7 %
Selling, general and
administrative expenses 24.1 % 24.0 % 23.7 % 23.6 %
Operating income 8.2 % 9.5 % 8.8 % 9.3 %
Net income 4.0 % 4.8 % 4.3 % 4.7 %
 
KOHL'S CORPORATION
CONSOLIDATED BALANCE SHEETS
(In Millions)
(Unaudited)
   
November 2, October 27,
2013 2012

Assets
Current assets:
Cash and cash equivalents $ 598 $ 550
Merchandise inventories 4,959 4,851
Deferred income taxes 147 124
Other 283   281
 
Total current assets 5,987 5,806
 
Property and equipment, net 8,925 9,009
Long-term investments 57 90
Other assets 276   256
 
Total assets $ 15,245   $ 15,161
 

Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable $ 2,261 $ 2,429
Accrued liabilities 1,198 1,127
Income taxes payable 41 48
Current portion of capital lease
and financing obligations 141   100
 
Total current liabilities 3,641 3,704
 
Long-term debt 2,792 2,492
Capital lease and financing obligations 1,950 1,986
Deferred income taxes 390 395
Other long-term liabilities 548 478
Shareholders' equity 5,924   6,106
 
Total liabilities and shareholders' equity $ 15,245   $ 15,161
 
KOHL'S CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Millions)
(Unaudited)
 
  Nine Months Ended
November 2,   October 27,
2013 2012
Operating activities
Net income $ 555 $ 609
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 665 620
Share-based compensation 41 37
Excess tax benefits from share-based compensation (3 ) (3 )
Deferred income taxes (1 ) (46 )
Other non-cash revenues and expenses 30 26
Changes in operating assets and liabilities:
Merchandise inventories (1,204 ) (1,628 )
Other current and long-term assets 11 30
Accounts payable 954 1,196
Accrued and other long-term liabilities 79 (47 )
Income taxes (113 ) (91 )
 
Net cash provided by operating activities 1,014   703  
 
Investing activities
Acquisition of property and equipment (465 ) (641 )
Sales of investments in auction rate securities 1 68
Other 13   5  
 
Net cash used in investing activities (451 ) (568 )
 
Financing activities
Treasury stock purchases (562 ) (883 )
Dividends paid (229 ) (227 )
Proceeds from issuance of debt 300 350
Proceeds from financing obligations 7
Capital lease and financing obligation payments (87 ) (87 )
Proceeds from stock option exercises 77 50
Excess tax benefits from share-based compensation 3 3
Deferred financing costs (4 ) (3 )
 
Net cash used in financing activities (502 ) (790 )
 
Net increase (decrease) in cash and cash equivalents 61 (655 )
Cash and cash equivalents at beginning of period 537   1,205  
 
Cash and cash equivalents at end of period $ 598   $ 550  
 

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