Kohl's Corp. (KSS) - Get Kohl's Corporation Report shares moved higher Wednesday after the retailer reached and agreement with activist investors that includes additional board members and an expanded buyback program.
Kohl's said two new independent directors -- former Denny's (DENN) - Get Denny's Corporation Report CMO Margaret Jenkins and former Burlington Stores (BURL) - Get Burlington Stores Inc. Report CEO Thomas Kingsbury -- will be added to the company's board as part of a broader agreement with a group of four activists investors that control a 9.3% stake in the Menomonee Falls, Wisconsin-based retailer. The board also expanded its existing share repurchase program to $2 billion.
Earlier this year, a group including Macellum Advisors GP LLC, Ancora Holdings and Legion Partners Asset Management LLC pressed Kohl's for changes, including a new company chairman, that it said would boost profitability.
“We are pleased to further strengthen our Board with the addition of Christine, Margaret and Tom as part of our continued refreshment process” said chairman Frank Sica. “Today’s agreement reflects our Board’s ongoing dialogue with our shareholders and our commitment to maximizing long-term value for all stakeholders."
"We welcome the new directors and look forward to their perspectives as we continue to execute Kohl’s growth strategy,” said Sica, who added that he will return from the board later this year.
Kohl's shares were marked 1.6% higher in early trading Wednesday following the activist agreement to change hands at $61.86 each.
Last month, Kohl's reinstated its regular dividend after posting better-than-expected fourth-quarter earnings that included sales of nearly $6 billion.
Kohl’s said it sees full year adjusted earnings in the range of $2.45 to $2.95 per share with net sales expected to increase in the "mid-teens percentage range" from the prior year.
“I look forward to working with our newly expanded Board to further advance our transformative strategy and deliver results for shareholders," said CEO Michell Gass. Amidst ongoing industry disruption and evolving consumer trends, we are uniquely positioned to build on our momentum and accelerate growth and profitability.”