Kohl’s Corporation (NYSE:KSS) today reported results for the
first quarter ended April 29, 2023.
- Net sales decreased 3.3% and comparable sales decreased
4.3%
- Gross margin increased 67 basis points
- Diluted earnings per share of $0.13
- Inventory declined 6%
- Affirms full year 2023 financial outlook
- Remains committed to strengthening balance sheet and to
maintaining current dividend
Tom Kingsbury, Kohl’s chief executive officer, said “Our first
quarter results were in line with our expectations and represented
a first step as we work to drive sales and earnings performance
over the long-term. We delivered margin expansion, as well as a 6%
reduction in inventory. In addition, our stores business achieved
productivity gains and Sephora at Kohl’s continued its sales
momentum.”
“We are making progress against each of our key 2023 priorities,
enhancing our customer experience, simplifying our value
strategies, managing inventory and expenses with discipline, and
strengthening our balance sheet. I would like to thank the entire
Kohl’s team for driving against these priorities with a clear focus
and strong determination. While there is still work to be done and
the macroeconomic environment remains challenging, we are affirming
our 2023 guidance and continue to have conviction in Kohl’s longer
term opportunity,” Kingsbury continued.
First Quarter 2023
Results
Comparisons refer to the 13-week period ended April 29, 2023
versus the 13-week period ended April 30, 2022
- Net sales decreased 3.3% year-over-year, to $3.4
billion, with comparable sales down 4.3%.
- Gross margin as a percentage of net sales was 39.0%, an
increase of 67 basis points.
- Selling, general & administrative (SG&A)
expenses decreased 4.2% year-over-year, to $1.2 billion. As a
percentage of total revenue, SG&A expenses were 34.7%, a
decrease of 13 basis points year-over-year.
- Operating income was $98 million compared to $82 million
in the prior year. As a percentage of total revenue, operating
income was 2.8%, an increase of 55 basis points
year-over-year.
- Net income was $14 million, or $0.13 per share. This
compares to net income of $14 million, or $0.11 per share in the
prior year.
- Inventory was $3.5 billion, a decrease of 6%
year-over-year.
- Operating cash flow was a use of ($202)
million.
2023 Financial and Capital Allocation
Outlook
For the full year 2023, the Company affirms its financial
outlook and currently expects the following:
- 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 May 10, 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 June 21, 2023 to
shareholders of record at the close of business on June 7,
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.
First Quarter 2023 Earnings Conference
Call
Kohl’s will host its quarterly earnings conference call at 9:00
am ET on May 24, 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 Kohl’s undertakes no
obligation to update them.
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 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.
KOHL’S CORPORATION
CONSOLIDATED STATEMENTS OF
OPERATIONS
(Unaudited)
Three Months Ended
(Dollars in Millions, Except per Share
Data)
April 29, 2023
April 30, 2022
Net sales
$
3,355
$
3,471
Other revenue
216
244
Total revenue
3,571
3,715
Cost of merchandise sold
2,047
2,140
Gross margin rate
39.0
%
38.3
%
Operating expenses:
Selling, general, and administrative
1,238
1,293
As a percent of total revenue
34.7
%
34.8
%
Depreciation and amortization
188
200
Operating income
98
82
Interest expense, net
84
68
Income before income taxes
14
14
Provision (benefit) for income taxes
—
—
Net income
$
14
$
14
Average number of shares:
Basic
110
127
Diluted
111
129
Earnings per share:
Basic
$
0.13
$
0.11
Diluted
$
0.13
$
0.11
KOHL’S CORPORATION
CONSOLIDATED BALANCE SHEETS (Unaudited)
(Dollars in Millions)
April 29, 2023
April 30, 2022
Assets
Current assets:
Cash and cash equivalents
$
286
$
646
Merchandise inventories
3,526
3,736
Other
347
381
Total current assets
4,159
4,763
Property and equipment, net
7,803
7,790
Operating leases
2,368
2,224
Other assets
380
476
Total assets
$
14,710
$
15,253
Liabilities and Shareholders'
Equity
Current liabilities:
Accounts payable
$
1,310
$
1,679
Accrued liabilities
1,164
1,316
Borrowings under revolving credit
facility
765
—
Current portion of:
Long-term debt
111
164
Finance leases and financing
obligations
93
108
Operating leases
111
127
Total current liabilities
3,554
3,394
Long-term debt
1,637
1,746
Finance leases and financing
obligations
2,710
2,584
Operating leases
2,634
2,474
Deferred income taxes
129
209
Other long-term liabilities
326
390
Shareholders' equity
3,720
4,456
Total liabilities and shareholders'
equity
$
14,710
$
15,253
KOHL’S CORPORATION
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(Unaudited)
Three Months Ended
(Dollars in Millions)
April 29, 2023
April 30, 2022
Operating activities
Net income
$
14
$
14
Adjustments to reconcile net income to net
cash used in operating activities:
Depreciation and amortization
188
200
Share-based compensation
9
18
Deferred income taxes
1
2
Non-cash lease expense
25
31
Other non-cash items
(4)
3
Changes in operating assets and
liabilities:
Merchandise inventories
(336)
(668)
Other current and long-term assets
49
(42)
Accounts payable
(20)
(4)
Accrued and other long-term
liabilities
(101)
17
Operating lease liabilities
(27)
(31)
Net cash used in operating activities
(202)
(460)
Investing activities
Acquisition of property and equipment
(94)
(221)
Proceeds from sale of real estate
1
4
Other
(1)
—
Net cash used in investing activities
(94)
(217)
Financing activities
Net borrowings under revolving credit
facility
680
—
Treasury stock purchases
—
(158)
Shares withheld for taxes on vested
restricted shares
(12)
(18)
Dividends paid
(55)
(63)
Repayment of long-term borrowings
(164)
—
Finance lease and financing obligation
payments
(25)
(29)
Proceeds from financing obligations
5
4
Net cash provided by (used in) financing
activities
429
(264)
Net increase (decrease) in cash and cash
equivalents
133
(941)
Cash and cash equivalents at beginning of
period
153
1,587
Cash and cash equivalents at end of
period
$
286
$
646
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230524005151/en/
Investor Relations: Mark Rupe, (262) 703-1266,
mark.rupe@kohls.com
Media: Jen Johnson, (262) 703-5241,
jen.johnson@kohls.com
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