Fourth quarter net sales decrease 7.2% and comparable sales decrease 6.6%

Fourth quarter diluted loss per share of ($2.49)

Introduces full year 2023 financial outlook

Committed to strengthening balance sheet, while continuing to return capital to shareholders through the dividend in 2023

Net sales decreased 7.2% year-over-year, to $5.8 billion, with comparable sales down 6.6%.

Gross margin as a percentage of net sales was 23.0%, a decrease of 1,016 basis points. Clearance markdowns impacted margin by approximately 750 basis points and product cost inflation impacted margin by approximately 200 bps.

Selling, general & administrative (SG&A) expenses decreased 0.6% year-over-year, to $1.7 billion. As a percentage of total revenue, SG&A expenses were 27.9%, an increase of 190 basis points year-over-year.

Operating loss was $302 million compared to operating income of $450 million in the prior year. As a percentage of total revenue, operating loss was 5.0%, a decrease of 1,195 basis points year-over-year.

Net loss was $273 million, or ($2.49) per diluted share. This compares to net income of $299 million, or $2.20 per diluted share in the prior year.

Inventory was $3.2 billion, an increase of 4% year-over-year.

Operating cash flow was $707 million driven by improvements in working capital during the fourth quarter of 2022.

Net sales decreased 7.1% year-over-year, to $17.2 billion, with comparable sales down 6.6%.

Gross margin as a percentage of net sales was 33.2%, a decrease of 485 basis points.

SG&A expenses increased 2.0% year-over-year, to $5.6 billion. As a percentage of total revenue, SG&A expense was 30.9%, an increase of 268 basis points year-over-year.

Operating income was $246 million compared to $1.7 billion in the prior year. As a percentage of total revenue, operating income was 1.4%, a decrease of 729 basis points year-over-year.

Net loss of $19 million, or ($0.15) per diluted share. This compares to net income of $938 million, or $6.32 per diluted share, and adjusted net income of $1.1 billion, or $7.33 per diluted share, in the prior year.

Operating cash flow was $282 million.

Net sales: A decrease of (2%) to (4%), includes the impact of the 53rd week which is worth approximately 1% year-over-year.

Operating margin: Approximately 4.0%.

Diluted earnings per share: In the range of $2.10 to $2.70, excluding any non-recurring charges.

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

Dividend: On February 21, 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 March 29, 2023 to shareholders of record at the close of business on March 15, 2023.

Debt Reduction: The Company retired $164 million of bonds that matured in February 2023, and expects to retire $111 million of bonds maturing in December 2023.

(Dollars in Millions, Except per Share Data)

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Amounts shown for the three and twelve months ended January 28, 2023 and the three months ended January 29, 2022 are GAAP as there are no adjustments to Non-GAAP. These amounts are shown for comparability purposes.

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