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Exhibit 99.1
Kohl’s Reports Second Quarter Fiscal 2021 Financial Results
| • | Second quarter net sales and earnings exceed expectations and company raises full year 2021 financial outlook |
| • | Second quarter net sales increase 31.4% |
| • | Record second quarter diluted earnings per share of $2.48 and company raises full year 2021 guidance to $5.80 to $6.10 |
| • | Strengthened financial position during the quarter, ending with $2.6 billion in cash |
| • | Repurchased $255 million of shares in the quarter and now plans to repurchase $500 million to $700 million of shares in 2021 |
MENOMONEE FALLS, Wis.—(BUSINESS WIRE)—August 19, 2021— Kohl’s Corporation (NYSE:KSS) today reported results for the quarter ended July 31, 2021.
| Three Months | Six Months | |||||||||||||||||||||||
| ($ in millions, except per share data) |
July 31, 2021 |
August 1, 2020 |
Change | July 31, 2021 |
August 1, 2020 |
Change | ||||||||||||||||||
| Total revenue |
$ | 4,447 | $ | 3,407 | 30.5 | % | $ | 8,334 | $ | 5,835 | 42.8 | % | ||||||||||||
| Net sales(1) |
31.4 | % | (22.9 | )% | 46.8 | % | (32.8 | )% | ||||||||||||||||
| Gross margin |
42.5 | % | 33.1 | % | 942 | bps | 40.9 | % | 26.8 | % | 1,415 | bps | ||||||||||||
| Selling, general, and administrative expenses |
$ | 1,241 | $ | 1,050 | 18.2 | % | $ | 2,411 | $ | 2,116 | 13.9 | % | ||||||||||||
| Reported |
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| Net income (loss) |
$ | 382 | $ | 47 | 100 | %+ | $ | 396 | $ | (494 | ) | 100 | %+ | |||||||||||
| Diluted earnings (loss) per share |
$ | 2.48 | $ | 0.30 | 100 | %+ | $ | 2.55 | $ | (3.21 | ) | 100 | %+ | |||||||||||
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Non-GAAP(2) |
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| Adjusted net (loss) income |
$ | 382 | $ | (39 | ) | 100 | %+ | $ | 547 | $ | (534 | ) | 100 | %+ | ||||||||||
| Adjusted diluted (loss) earnings per share |
$ | 2.48 | $ | (0.25 | ) | 100 | %+ | $ | 3.52 | $ | (3.47 | ) | 100 | %+ | ||||||||||
| (1) | Represents change in Net sales vs. prior year period. |
| (2) | Excludes Loss on extinguishment of debt, Impairments, store closing, and other costs, and Gain on sale of real estate. |
“Our performance in the second quarter marked another important step in further establishing Kohl’s as the leading destination for the active and casual lifestyle. We delivered record second quarter earnings with sales and margins materially exceeding expectations. As pleased as we are with our ongoing strategic progress, much of our opportunity is still ahead of us. We are on the eve of launching several transformational partnerships that will drive sustainable growth for years to come,” said Michelle Gass, Kohl’s chief executive officer.
“Based on our results, we are raising our full year 2021 guidance, which positions us to achieve many of our 2023 strategic goals this year, well ahead of our plan. In addition, we have accelerated our share repurchase activity, underscoring our confidence in the business and our commitment to creating shareholder value,” said Gass.
Updated 2021 Financial Outlook
The Company is raising its full year 2021 financial outlook to include the following:
| • | Net sales is now expected to increase in the low-twenties percentage range compared to the previous expectation of mid-to-high teens percentage range increase |
| • | Operating margin is now expected to be in the range of 7.4% to 7.6% compared to the previous expectation of 5.7% to 6.1% |
| • | Adjusted earnings per share is now expected to be in the range of $5.80 to $6.10, excluding any non-recurring charges, compared to the previous expectation of $3.80 to $4.20 |
Dividend
As previously announced, on August 10, 2021, Kohl’s Board of Directors declared a quarterly cash dividend on the Company’s common stock of $0.25 per share. The dividend is payable September 22, 2021 to shareholders of record at the close of business on September 8, 2021.
Second Quarter 2021 Earnings Conference Call
Kohl’s will host its quarterly earnings conference call at 9:00 am ET on August 19, 2021. 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 and Non-GAAP Measures
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. 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 Kohl’s undertakes no obligation to update them.
In this press release, the Company provides information regarding adjusted net income (loss) and adjusted diluted earnings (loss) per share, which are not recognized terms under U.S. generally accepted accounting principles (“GAAP”) and do not purport to be alternatives to net income as a measure of operating performance. A reconciliation of adjusted net income (loss) and adjusted diluted earnings (loss) per share is provided in this release. The Company believes that the use of these non-GAAP financial measures provides investors with enhanced visibility into its results with respect to the impact of certain costs. Because not all companies use identical calculations, these presentations may not be comparable to other similarly titled measures of other companies.
About Kohl’s
Kohl’s (NYSE: KSS) is a leading omnichannel retailer. With more than 1,100 stores in 49 states and the online convenience of Kohls.com and the Kohl’s App, Kohl’s offers amazing national and exclusive brands at incredible savings for families nationwide. Kohl’s is uniquely positioned to deliver against its strategy and its vision to be the most trusted retailer of choice for the active and casual lifestyle. Kohl’s is committed to progress in its diversity and inclusion pledges, and the company’s environmental, social and corporate governance (ESG) stewardship. 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 or follow @KohlsNews on Twitter.
Contacts
Investor Relations:
Mark Rupe, (262) 703-1266, mark.rupe@kohls.com
Media:
Jen Johnson, (262) 703-5241, jen.johnson@kohls.com
Source: Kohl’s
KOHL’S CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
| Three Months Ended | Six Months Ended | |||||||||||||||
| (Dollars in Millions, Except per Share Data) |
July 31, 2021 |
August 1, 2020 |
July 31, 2021 |
August 1, 2020 |
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| Net sales |
$ | 4,223 | $ | 3,213 | $ | 7,885 | $ | 5,373 | ||||||||
| Other revenue |
224 | 194 | 449 | 462 | ||||||||||||
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| Total revenue |
4,447 | 3,407 | 8,334 | 5,835 | ||||||||||||
| Cost of merchandise sold |
2,426 | 2,149 | 4,659 | 3,936 | ||||||||||||
| Gross margin rate |
42.5 | % | 33.1 | % | 40.9 | % | 26.8 | % | ||||||||
| Operating expenses: |
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| Selling, general, and administrative |
1,241 | 1,050 | 2,411 | 2,116 | ||||||||||||
| As a percent of total revenue |
27.9 | % | 30.8 | % | 28.9 | % | 36.3 | % | ||||||||
| Depreciation and amortization |
210 | 219 | 421 | 446 | ||||||||||||
| Impairments, store closing, and other |
— | (2 | ) | — | 64 | |||||||||||
| (Gain) on sale of real estate |
— | (127 | ) | — | (127 | ) | ||||||||||
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| Operating income (loss) |
570 | 118 | 843 | (600 | ) | |||||||||||
| Interest expense, net |
62 | 78 | 129 | 136 | ||||||||||||
| Loss on extinguishment of debt |
— | — | 201 | — | ||||||||||||
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| Income (loss) before income taxes |
508 | 40 | 513 | (736 | ) | |||||||||||
| Provision (benefit) for income taxes |
126 | (7 | ) | 117 | (242 | ) | ||||||||||
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| Net income (loss) |
$ | 382 | $ | 47 | $ | 396 | $ | (494 | ) | |||||||
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| Average number of shares: |
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| Basic |
152 | 154 | 153 | 154 | ||||||||||||
| Diluted |
154 | 155 | 155 | 154 | ||||||||||||
| Earnings (loss) per share: |
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| Basic |
$ | 2.51 | $ | 0.31 | $ | 2.58 | $ | (3.21 | ) | |||||||
| Diluted |
$ | 2.48 | $ | 0.30 | $ | 2.55 | $ | (3.21 | ) | |||||||
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ADJUSTED NET INCOME (LOSS) AND DILUTED EARNINGS (LOSS) PER SHARE, NON-GAAP FINANCIAL MEASURES
(Unaudited)
| Three Months Ended | Six Months Ended | |||||||||||||||
| (Dollars in Millions, Except per Share Data) |
July 31, 2021 |
August 1, 2020 |
July 31, 2021 |
August 1, 2020 |
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| Net income (loss) |
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| GAAP |
$ | 382 | $ | 47 | $ | 396 | $ | (494 | ) | |||||||
| Impairments, store closing, and other |
— | (2 | ) | — | 64 | |||||||||||
| (Gain) on sale of real estate |
— | (127 | ) | — | (127 | ) | ||||||||||
| Loss on extinguishment of debt |
— | — | 201 | — | ||||||||||||
| Income tax impact of items noted above |
— | 43 | (50 | ) | 23 | |||||||||||
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| Adjusted (non-GAAP) |
$ | 382 | $ | (39 | ) | $ | 547 | $ | (534 | ) | ||||||
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| Diluted earnings (loss) per share |
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| GAAP(1) |
$ | 2.48 | $ | 0.30 | $ | 2.55 | $ | (3.21 | ) | |||||||
| Impairments, store closing, and other |
— | (0.01 | ) | — | 0.41 | |||||||||||
| (Gain) on sale of real estate |
— | (0.82 | ) | — | (0.82 | ) | ||||||||||
| Loss on extinguishment of debt |
— | — | 1.29 | — | ||||||||||||
| Income tax impact of items noted above |
— | 0.28 | (0.32 | ) | 0.15 | |||||||||||
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| Adjusted (non-GAAP)(2) |
$ | 2.48 | $ | (0.25 | ) | $ | 3.52 | $ | (3.47 | ) | ||||||
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| (1) | Weighted average diluted shares outstanding for purpose of calculating diluted earnings per share for the three months ended August 1, 2020 was 155 million, which includes the dilutive effect of share-based awards as determined under the treasury stock method. |
| (2) | Weighted average diluted shares outstanding for purposes of calculating diluted adjusted (loss) earnings per share for the three months ended August 1, 2020 was 154 million as the effect of including dilutive shares would be antidilutive. |
KOHL’S CORPORATION
CONSOLIDATED BALANCE SHEETS
(Unaudited)
| (Dollars in Millions) |
July 31, 2021 |
August 1, 2020 |
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| Assets |
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| Current assets: |
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| Cash and cash equivalents |
$ | 2,569 | $ | 2,428 | ||||
| Merchandise inventories |
2,733 | 2,698 | ||||||
| Other |
356 | 562 | ||||||
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| Total current assets |
5,658 | 5,688 | ||||||
| Property and equipment, net |
7,107 | 6,970 | ||||||
| Operating leases |
2,301 | 2,418 | ||||||
| Other assets |
440 | 159 | ||||||
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| Total assets |
$ | 15,506 | $ | 15,235 | ||||
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| Liabilities and Shareholders’ Equity |
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| Current liabilities: |
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| Accounts payable |
$ | 1,495 | $ | 1,064 | ||||
| Accrued liabilities |
1,554 | 1,216 | ||||||
| Current portion of: |
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| Finance leases and financing obligations |
117 | 126 | ||||||
| Operating leases |
143 | 160 | ||||||
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| Total current liabilities |
3,309 | 2,566 | ||||||
| Long-term debt |
1,909 | 3,450 | ||||||
| Finance leases and financing obligations |
1,906 | 1,356 | ||||||
| Operating leases |
2,532 | 2,637 | ||||||
| Deferred income taxes |
245 | 122 | ||||||
| Other long-term liabilities |
386 | 267 | ||||||
| Shareholders’ equity |
5,219 | 4,837 | ||||||
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| Total liabilities and shareholders’ equity |
$ | 15,506 | $ | 15,235 | ||||
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KOHL’S CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| Six Months Ended | ||||||||
| (Dollars in Millions) |
July 31, 2021 |
August 1, 2020 |
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| Operating activities |
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| Net income (loss) |
$ | 396 | $ | (494 | ) | |||
| Adjustments to reconcile net income (loss) to net cash provided by operating activities: |
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| Depreciation and amortization |
421 | 446 | ||||||
| Share-based compensation |
25 | 14 | ||||||
| Deferred income taxes |
(57 | ) | (132 | ) | ||||
| Impairments, store closing, and other costs |
— | 48 | ||||||
| (Gain) on sale of real estate |
— | (127 | ) | |||||
| Loss on extinguishment of debt |
201 | — | ||||||
| Non-cash inventory costs |
— | 187 | ||||||
| Non-cash lease expense |
74 | 74 | ||||||
| Other non-cash expenses |
9 | 10 | ||||||
| Changes in operating assets and liabilities: |
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| Merchandise inventories |
(138 | ) | 656 | |||||
| Other current and long-term assets |
590 | (170 | ) | |||||
| Accounts payable |
19 | (142 | ) | |||||
| Accrued and other long-term liabilities |
228 | 16 | ||||||
| Operating lease liabilities |
(76 | ) | (82 | ) | ||||
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| Net cash provided by operating activities |
1,692 | 304 | ||||||
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| Investing activities |
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| Acquisition of property and equipment |
(191 | ) | (196 | ) | ||||
| Proceeds from sale of real estate |
4 | 193 | ||||||
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| Net cash used in investing activities |
(187 | ) | (3 | ) | ||||
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| Financing activities |
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| Proceeds from issuance of debt |
500 | 2,097 | ||||||
| Deferred financing costs |
(5 | ) | (19 | ) | ||||
| Treasury stock purchases |
(301 | ) | (8 | ) | ||||
| Shares withheld for taxes on vested restricted shares |
(25 | ) | (20 | ) | ||||
| Dividends paid |
(77 | ) | (108 | ) | ||||
| Reduction of long-term borrowings |
(1,044 | ) | (497 | ) | ||||
| Premium paid on redemption of debt |
(192 | ) | — | |||||
| Finance lease and financing obligation payments |
(65 | ) | (44 | ) | ||||
| Proceeds from financing obligations |
4 | 3 | ||||||
| Proceeds from stock option exercises |
1 | — | ||||||
| Other |
(3 | ) | — | |||||
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| Net cash provided by (used in) financing activities |
(1,207 | ) | 1,404 | |||||
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| Net increase in cash and cash equivalents |
298 | 1,705 | ||||||
| Cash and cash equivalents at beginning of period |
2,271 | 723 | ||||||
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| Cash and cash equivalents at end of period |
$ | 2,569 | $ | 2,428 | ||||
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