MENOMONEE FALLS, Wis.--(BUSINESS WIRE)-- Kohl’s Corporation (NYSE:KSS) today reported results for the second quarter ended July 29, 2023.
Tom Kingsbury, Kohl’s chief executive officer, said, “Our second quarter earnings were in line with our expectations. We maintained strong sales momentum in Sephora at Kohl’s, reduced inventory by 14%, and managed expenses tightly. Further, solid cash flow generation allowed us to reduce our borrowings in the period.”
“Many of our strategic efforts are just underway, which we expect will contribute incrementally in the back half of the year, and even more so in 2024 and beyond. We have enhanced the store experience and recently opened an additional 200 Sephora at Kohl’s shops, and are taking steps to further optimize our assortment and simplify our value strategies. Looking ahead, we are reaffirming our 2023 guidance and remain confident in our longer-term opportunity. I want to thank the entire Kohl’s team for their efforts to support and drive improved Kohl’s performance,” Kingsbury continued.
Second Quarter 2023 Results
Comparisons refer to the 13-week period ended July 29, 2023 versus the 13-week period ended July 30, 2022
Six Months Fiscal Year 2023 Results
Comparisons refer to the 26-week period ended July 29, 2023 versus the 26-week period ended July 30, 2022
2023 Financial and Capital Allocation Outlook
For the full year 2023, the Company reaffirms its financial outlook and currently expects the following:
Second Quarter 2023 Earnings Conference Call
Kohl’s will host its quarterly earnings conference call at 9:00 am ET on August 23, 2023. 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
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 are 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 the Company undertakes no obligation to update them.
About Kohl's
Kohl’s (NYSE: KSS) is a leading omnichannel retailer built on a foundation that combines great brands, incredible value and convenience for our customers. Kohl's serves millions of families in our more than 1,100 stores in 49 states, online at Kohls.com, and through our Kohl's App. 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.
KOHL’S CORPORATION | ||||
CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
(Unaudited) | ||||
| Three Months Ended | Six Months Ended | ||
(Dollars in Millions, Except per Share Data) | July 29, 2023 | July 30, 2022 | July 29, 2023 | July 30, 2022 |
Net sales | $ 3,678 | $ 3,863 | $ 7,033 | $ 7,334 |
Other revenue | 217 | 224 | 433 | 468 |
Total revenue | 3,895 | 4,087 | 7,466 | 7,802 |
Cost of merchandise sold | 2,242 | 2,332 | 4,289 | 4,472 |
Gross margin rate | 39.0% | 39.6% | 39.0% | 39.0% |
Operating expenses: |
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|
|
|
Selling, general, and administrative | 1,304 | 1,283 | 2,542 | 2,576 |
As a percent of total revenue | 33.5% | 31.4% | 34.1% | 33.0% |
Depreciation and amortization | 186 | 206 | 374 | 406 |
Operating income | 163 | 266 | 261 | 348 |
Interest expense, net | 89 | 77 | 173 | 145 |
Income before income taxes | 74 | 189 | 88 | 203 |
Provision for income taxes | 16 | 46 | 16 | 46 |
Net income | $ 58 | $ 143 | $ 72 | $ 157 |
Average number of shares: |
|
|
|
|
Basic | 110 | 127 | 110 | 127 |
Diluted | 111 | 128 | 111 | 129 |
Earnings per share: |
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|
|
|
Basic | $ 0.52 | $ 1.13 | $ 0.65 | $ 1.24 |
Diluted | $ 0.52 | $ 1.11 | $ 0.65 | $ 1.22 |
KOHL’S CORPORATION | ||
CONSOLIDATED BALANCE SHEETS | ||
(Unaudited) | ||
(Dollars in Millions) | July 29, 2023 | July 30, 2022 |
Assets |
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Current assets: |
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Cash and cash equivalents | $ 204 | $ 222 |
Merchandise inventories | 3,474 | 4,034 |
Other | 296 | 374 |
Total current assets | 3,974 | 4,630 |
Property and equipment, net | 7,945 | 8,228 |
Operating leases | 2,493 | 2,296 |
Other assets | 382 | 469 |
Total assets | $ 14,794 | $ 15,623 |
Liabilities and Shareholders’ Equity |
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Current liabilities: |
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Accounts payable | $ 1,376 | $ 1,497 |
Accrued liabilities | 1,246 | 1,426 |
Borrowings under revolving credit facility | 560 | 79 |
Current portion of: |
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Long-term debt | 111 | 164 |
Finance leases and financing obligations | 84 | 96 |
Operating leases | 93 | 108 |
Total current liabilities | 3,470 | 3,370 |
Long-term debt | 1,637 | 1,747 |
Finance leases and financing obligations | 2,730 | 2,830 |
Operating leases | 2,777 | 2,568 |
Deferred income taxes | 121 | 194 |
Other long-term liabilities | 324 | 370 |
Shareholders’ equity: | 3,735 | 4,544 |
Total liabilities and shareholders’ equity | $ 14,794 | $ 15,623 |
KOHL’S CORPORATION | ||
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||
(Unaudited) | ||
| Six Months Ended | |
(Dollars in Millions) | July 29, 2023 | July 30, 2022 |
Operating activities |
|
|
Net income | $ 72 | $ 157 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: |
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Depreciation and amortization | 374 | 406 |
Share-based compensation | 20 | 26 |
Deferred income taxes | (7) | (12) |
Non-cash lease expense | 48 | 56 |
Other non-cash items | (2) | 5 |
Changes in operating assets and liabilities: |
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|
Merchandise inventories | (283) | (964) |
Other current and long-term assets | 61 | (29) |
Accounts payable | 46 | (185) |
Accrued and other long-term liabilities | (52) | 51 |
Operating lease liabilities | (49) | (57) |
Net cash provided by (used in) operating activities | 228 | (546) |
Investing activities |
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|
Acquisition of property and equipment | (338) | (548) |
Proceeds from sale of real estate | 4 | 4 |
Other | (1) | — |
Net cash used in investing activities | (335) | (544) |
Financing activities |
|
|
Net borrowings under revolving credit facility | 475 | 79 |
Treasury stock purchases | — | (158) |
Shares withheld for taxes on vested restricted shares | (13) | (20) |
Dividends paid | (110) | (127) |
Repayment of long-term borrowings | (164) | — |
Finance lease and financing obligation payments | (47) | (55) |
Proceeds from financing obligations | 17 | 5 |
Proceeds from stock option exercises | — | 1 |
Net cash provided by (used in) financing activities | 158 | (275) |
Net increase (decrease) in cash and cash equivalents | 51 | (1,365) |
Cash and cash equivalents at beginning of period | 153 | 1,587 |
Cash and cash equivalents at end of period | $ 204 | $ 222 |
View source version on businesswire.com: https://www.businesswire.com/news/home/20230823908494/en/
Investor Relations: Mark Rupe, (262) 703-1266, mark.rupe@kohls.com
Media: Jen Johnson, (262) 703-5241, jen.johnson@kohls.com
Source: Kohl's