KOHL'S CORPORATION
MENOMONEE FALLS, Wis.--(BUSINESS WIRE)--February 26, 2015-- Kohl's Corporation
(NYSE:KSS). Kohl's Corporation today reported results for the quarter and year ended January 31, 2015.
($ in millions, except per share amounts) 2014 2013 Change 2014 2013 Change Total sales $6,337 $6,099 3.9% $19,023 $19,031 - % Comparable store sales 3.7% (2.0)% - (0.3)% (1.2)% -
Net income $369 $334 10% $867 $889 (2)%
Diluted earnings per share $1.83 $1.56 17% $4.24 $4.05 5%
Kevin Mansell, Kohl's chairman, president and chief executive officer, said, "Our fourth quarter results showed significant improvement as many of our Greatness Agenda initiatives took hold. Our 3.7% increase in comparable sales was driven by both transactions per store - a key area of focus - and average transaction value. The sales strength was broad as all lines of business and all geographic regions reported higher sales. Our teams managed both expenses and inventories well, allowing us to exceed our previous earnings guidance."
Dividend
On February 25, 2015 Kohl's Board of Directors declared a quarterly cash dividend on the Company's common stock of $0.45 per share, a 15% increase over its prior dividend. The dividend is payable March
25, 2015 to shareholders of record at the close of business on March 11, 2015.
Store Update
Kohl's ended the fiscal year with 1,162 stores in 49 states. During 2014, the Company opened seven stores in new locations, relocated two existing stores, and closed three stores.
Initial 2015 Earnings Guidance
The Company expects earnings per diluted share of $4.40 to $4.60 for fiscal 2015. This guidance is based on the following assumptions:
• Total sales increase of 1.8% to 2.8%
• Comparable sales increase of 1.5% to 2.5%
• Gross margin as a percentage of sales to increase 0 to 20 basis points over 2014
• SG&A expense to increase 1.5% to 2.5% over 2014
• Depreciation expense to be $940 million
• Interest expense to be $335 million
• Effective tax rate of 37%
• $1 billion in share repurchases at an average price of $70 per share
• Capital expenditures of $800 million
Fourth Quarter 2014 Earnings Conference Call
Kohl's will host its quarterly earnings conference call at 8:30 am ET on February 26, 2015. The phone number for the conference call is (800) 230-1074. Replays of the call will be available for 30 days by dialing (800) 475-6701. The conference ID is 346898. 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 2015 earnings guidance. 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
Kohl's (NYSE: KSS) is a leading specialty department store with 1,162 stores in 49 states. With a commitment to inspiring and empowering families to lead fulfilled lives, the company offers amazing national and exclusive brands, incredible savings and inspiring shopping experiences in-store,
online at Kohls.comand via mobile devices. Committed to its communities, Kohl's has raised more than $274 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 additional information about Kohl's philanthropic and environmental initiatives,
visit www.Kohls.com/Cares. For a list of store locations and information, or for the added convenience of shopping online, visit www.Kohls.com.
Connect with Kohl's:
Facebook (http://www.facebook.com/Kohls) Twitter (http://twitter.com/Kohls)
Google+ (http://plus.google.com/+Kohls) Pinterest (http://pinterest.com/Kohls) Instagram (http://instagram.com/Kohls) YouTube (http://youtube.com/Kohls)
Contacts
Investor Relations:Wes McDonald, Senior Executive Vice President and Chief Financial Officer, (262) 703-1893
Media:Bevin Bailis, SVP, PR and Communications, (262) 703-1464
KOHL'S CORPORATION CONSOLIDATED STATEMENTS OF INCOME (In Millions, except per share data)
(Unaudited)
Net sales $ 6,337 $ 6,099 $ 19,023 $ 19,031
Cost of merchandise sold 4,190 4,024 12,098 12,087
Gross margin 2,147 2,075 6,925 6,944
Operating expenses:
Selling, general, and administrative 1,272 1,242 4,350 4,313
Depreciation and amortization 221 224 886 889
Operating income 654 609 1,689 1,742
Interest expense, net 84 87 340 338
Income before income taxes 570 522 1,349 1,404
Provision for income taxes 201 188 482 515
Net income $ 369 $ 334 $ 867 $ 889
Basic net income per share $ 1.85 $ 1.57 $ 4.28 $ 4.08
Average number of shares 199 213 203 218
Diluted net income per share $ 1.83 $ 1.56 $ 4.24 $ 4.05
Average number of shares 201 215 204 220
Gross margin 33.9% 34.0% 36.4% 36.5% Selling, general and
administrative expenses 20.1% 20.4% 22.9% 22.7% Operating income 10.3% 10.0% 8.9% 9.2% Net income 5.8% 5.5% 4.6% 4.7%
(Unaudited)
Assets
Current assets:
Cash and cash equivalents | $ 1,407 | $ 971 |
Merchandise inventories | 3,814 | 3,874 |
Deferred income taxes | 116 | 142 |
Other | 361 | 327 |
Total current assets | 5,698 | 5,314 |
Property and equipment, net | 8,515 | 8,745 |
Other assets | 218 | 298 |
Total assets | $ 14,431 | $ 14,357 |
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable | $ 1,511 | $ 1,365 |
Accrued liabilities | 1,160 | 1,138 |
Income taxes payable | 78 | 116 |
Current portion of capital lease | ||
and financing obligations | 110 | 139 |
Total current liabilities | 2,859 | 2,758 |
Long-term debt | 2,793 | 2,792 |
Capital lease and financing obligations | 1,858 | 1,930 |
Deferred income taxes | 368 | 339 |
Other long-term liabilities | 562 | 560 |
Shareholders' equity | 5,991 | 5,978 |
Total liabilities and shareholders' equity $ 14,431 $ 14,357
(Unaudited)
2014 2013
Net income $ 867 $ 889
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization | 886 | 889 |
Share-based compensation | 48 | 55 |
Excess tax benefits from share-based compensation | (3) | (3) |
Deferred income taxes | 46 | (11) |
Other non-cash revenues and expenses Changes in operating assets and liabilities: Merchandise inventories | 31 68 | 43 (116) |
Other current and long-term assets | (33) | (19) |
Accounts payable | 146 | 58 |
Accrued and other long-term liabilities | 33 | 149 |
Income taxes | (65) | (50) |
Net cash provided by operating activities | 2,024 | 1,884 |
Investing activities Acquisition of property and equipment | (682) | (643) |
Sales of investments in auction rate securities | 82 | 1 |
Other | 7 | 19 |
Net cash used in investing activities | (593) | (623) |
Financing activities Treasury stock purchases | (677) | (799) |
Shares withheld for restricted shares | (19) | (13) |
Dividends paid | (317) | (302) |
Proceeds from issuance of debt, net | - | 296 |
Proceeds from financing obligations | 6 | 1 |
Capital lease and financing obligation payments | (114) | (115) |
Proceeds from stock option exercises | 123 | 102 |
Excess tax benefits from share-based compensation | 3 | 3 |
Net cash used in financing activities | (995) | (827) |
Net increase in cash and cash equivalents | 436 | 434 |
Cash and cash equivalents at beginning of period | 971 | 537 |
Cash and cash equivalents at end of period | $ 1,407 | $ 971 |
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