Kohl's Corporation Reports Fourth Quarter Financial Results

Kohl’s Corporation (NYSE:KSS). Kohl’s Corporation today reported results for the quarter and fiscal year ended February 1, 2014.
 
  Quarter   Year
($ in millions, except per share amounts)   2013   2012   Change   2013   2012   Change
Increase (decrease) in        
comparable sales (1) (2.0 )% 1.9 % - (1.2 )% 0.3 % -
 
Total sales(2) $ 6,099 $ 6,342 (3.8)% $ 19,031 $ 19,279 (1.3)%
Net income $ 334 $ 378 (12)% $ 889 $ 986 (10)%
Diluted earnings per share   $ 1.56     $ 1.66     (6)%   $ 4.05     $ 4.17     (3)%
 

(1) Compares the periods ended February 1, 2014 to the periods ended January 26, 2013

(2) Compares the periods ended February 1, 2014 to the periods ended February 2, 2013
 

Kevin Mansell, Kohl’s chairman, president and chief executive officer, said, "We were pleased with our sales during the November and December holiday season as the customer responded favorably to our merchandise and values. Despite increased shipping costs related to our E-Commerce business, we were able to achieve our gross margin guidance for the quarter. We believe our inventory levels and assortment are well-positioned as we transition into the spring season."

Impact of 53rd Week in Fiscal 2012

The retail calendar for fiscal January 2013 included a fifth week, resulting in a 14-week fiscal fourth quarter and a 53-week year. During this 53 rd week, total sales were $169 million; selling, general and administrative expenses were $30 million; interest was $2 million; net income was $15 million and diluted earnings per share was $0.06.

Dividend

On February 26, 2014 Kohl's Board of Directors declared a quarterly cash dividend on the Company's common stock of $0.39 per share, an increase of 11 percent over its previous dividend. The dividend is payable March 26, 2014 to shareholders of record at the close of business on March 12, 2014.

Store Update

Kohl’s ended the quarter with 1,158 stores in 49 states, compared with 1,146 stores at the same time last year. During 2013, the Company opened 12 new stores and completed 30 remodels.

Earnings Guidance

The Company issued its initial guidance for fiscal 2014. Based on assumptions of total sales increases of 0.5 percent to 2.5 percent and comparable sales increases of 0 to 2 percent, the Company expects earnings per diluted share of $4.05 to $4.45 for the year.

Fourth Quarter 2013 Earnings Conference Call

Kohl’s will host its quarterly earnings conference call at 8:30 am ET on February 27, 2014. The phone number for the conference call is (706) 902-0486 and the conference ID is 24984977. Replays of the call will be available for 30 days by dialing (855) 859-2056 or (404) 537-3406. The conference call and replays are also accessible via the Company's web site at http://www.kohlscorporation.com/InvestorRelations/event-calendar.htm.

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, including guidance on the Company's targeted earnings. Kohl's 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 Kohl's actual results to differ materially from those anticipated by the forward-looking statements. These risks and uncertainties include, but are not limited to, those described in Item 1A in Kohl's Annual Report on Form 10-K, which is expressly incorporated herein by reference, and other factors as may periodically be described in Kohl's filings with the SEC.

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 Twelve Months
Feb 1, 2014 Feb 2, 2013 Feb 1, 2014 Feb 2, 2013
(13 Weeks) (14 Weeks) (52 Weeks) (53 Weeks)
 
Net sales $ 6,099 $ 6,342 $ 19,031 $ 19,279
Cost of merchandise sold 4,024   4,230   12,087   12,289  
 
Gross margin 2,075 2,112 6,944 6,990
 
Operating expenses:
Selling, general, and administrative 1,242 1,212 4,313 4,267
Depreciation and amortization 224   214   889   833  
 
Operating income 609 686 1,742 1,890
 
Interest expense, net 87   85   338   329  
 
Income before income taxes 522 601 1,404 1,561
Provision for income taxes 188   223   515   575  
 
Net income $ 334   $ 378   $ 889   $ 986  
 
Basic net income per share $ 1.57 $ 1.66 $ 4.08 $ 4.19
Average number of shares 213 227 218 235
 
Diluted net income per share $ 1.56 $ 1.66 $ 4.05 $ 4.17
Average number of shares 215 228 220 237
 
As a percent of net sales:
Gross margin 34.0 % 33.3 % 36.5 % 36.3 %
Selling, general and
administrative expenses 20.4 % 19.1 % 22.7 % 22.1 %
Operating income 10.0 % 10.8 % 9.2 % 9.8 %
Net income 5.5 % 6.0 % 4.7 % 5.1 %
 
KOHL'S CORPORATION
CONSOLIDATED BALANCE SHEETS
(In Millions)
(Unaudited)
   
Feb 1, 2014 Feb 2, 2013

Assets
Current assets:
Cash and cash equivalents $ 971 $ 537
Merchandise inventories 3,874 3,748
Deferred income taxes 142 122
Other 305  

 
312
 
Total current assets 5,292 4,719
 
Property and equipment, net 8,745 8,872
Long-term investments 64 53
Other assets 277   261
 
Total assets $ 14,378   $ 13,905
 

Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable $ 1,365 $ 1,307
Accrued liabilities 1,138 986
Income taxes payable 94 137
Current portion of capital lease
and financing obligations 139   105
 
Total current liabilities 2,736 2,535
 
Long-term debt 2,792 2,492
Capital lease and financing obligations 1,930 1,956
Deferred income taxes 382 362
Other long-term liabilities 560 512
Shareholders' equity 5,978   6,048
 
Total liabilities and shareholders' equity $ 14,378   $ 13,905
 
KOHL'S CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Millions)
(Unaudited)
 
  Feb 1, 2014   Feb 2, 2013
(52 Weeks) (53 Weeks)
Operating activities
Net income $ 889 $ 986
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 889 833
Share-based compensation 55 50
Excess tax benefits from share-based compensation (3 ) (4 )
Deferred income taxes (7 ) (79 )
Other non-cash revenues and expenses 43 29
Changes in operating assets and liabilities:
Merchandise inventories (116 ) (523 )
Other current and long-term assets (11 ) (37 )
Accounts payable 58 74
Accrued and other long-term liabilities 149 (60 )
Income taxes (62 ) (4 )
 
Net cash provided by operating activities 1,884   1,265  
 
Investing activities
Acquisition of property and equipment (643 ) (785 )
Sales of investments in auction rate securities 1 109
Other 19   16  
 
Net cash used in investing activities (623 ) (660 )
 
Financing activities
Treasury stock purchases (799 ) (1,284 )
Shares withheld for restricted shares (13 ) (9 )
Dividends paid (302 ) (300 )
Proceeds from issuance of debt 300 350
Deferred financing costs (4 ) (3 )
Proceeds from financing obligations 1 12
Capital lease and financing obligation payments (115 ) (111 )
Proceeds from stock option exercises 102 68
Excess tax benefits from share-based compensation 3   4  
 
Net cash used in financing activities (827 ) (1,273 )
 
Net increase (decrease) in cash and cash equivalents 434 (668 )
Cash and cash equivalents at beginning of period 537   1,205  
 
Cash and cash equivalents at end of period $ 971   $ 537  
 

Copyright Business Wire 2010

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