Kohl’s Corporation (NYSE:KSS) today reported results for the
quarter and year ended January 28, 2012.
Fourth Quarter Results
Kohl’s Corporation reported fourth quarter diluted earnings per
share increased 9% to $1.81. Net income for the quarter decreased
8% to $455 million, compared to $494 million ($1.66 per diluted
share) a year ago. Net sales were $6.0 billion, a decrease of 0.3
percent from the prior year quarter. Comparable store sales for the
quarter decreased 2.1%.
Fiscal 2011 Results
For the year, diluted earnings per share increased 17% to $4.30
and net income increased 4% to $1,167 million. Net sales were $18.8
billion, an increase of 2.2%. Comparable store sales increased
0.5%.
Kevin Mansell, Kohl’s chairman, president and chief executive
officer, said, “I am pleased that 2011 was another year of
profitability and earnings per share growth for our shareholders.
With the commitment of each of our 140,000 associates, we were able
to navigate a difficult holiday sales season through strong expense
and inventory management. We achieved a major milestone in 2011
with our E-Commerce business reporting $1 billion in revenues. We
are starting 2012 with considerable brand excitement, with the
launch of Rock and Republic, continued excitement from our Jennifer
Lopez and Marc Anthony brands, and expansion of the successful ELLE
and Simply Vera Vera Wang brands into new categories.”
The Company increased its free cash flow (a non-GAAP financial
measure) by 27% to $1.1 billion and returned approximately $2.6
billion to shareholders in 2011 with its first-ever dividend and
share repurchases.
Quarterly Dividend
Declared
On February 22, 2012, Kohl's Board of Directors declared a
quarterly cash dividend of $0.32 per share of Kohl’s common stock;
a $0.07 per share and 28% increase over previous quarterly
dividends. The dividend is payable March 28, 2012 to shareholders
of record at the close of business on March 7, 2012.
Store Update
Kohl’s opened 40 stores during 2011 and now has 1,127 stores in
49 states, compared with 1,089 stores at the same time last year.
The Company remodeled 100 stores in 2011.
Earnings Guidance
The Company issued its initial guidance for fiscal 2012. Based
on assumptions of a total sales increase of 4.5% and a comparable
store sales increase of 2%, the Company expects earnings per
diluted share of $4.75 for the year. For the first fiscal quarter,
the Company expects earnings per diluted share of $0.60 based on
assumptions of a total sales increase of 3% and a comparable store
sales increase of 1%.
Fourth Quarter 2011
Earnings
Kohl’s will host a fourth quarter earnings conference call at
8:30 am ET on February 23, 2012. The phone number for the
conference call is (706) 902-0486 and the conference ID is
41360705. Replays of the call will be available for 30 days by
dialing (855) 859-2056 or (404) 537-3406 and referencing Conference
ID 41360705. The conference call is also accessible via the
Company's web site at
http://www.kohlscorporation.com/InvestorRelations/event-calendar.htm.
Free Cash Flow
Free cash flow is a non-GAAP financial measure which we define
as net cash provided by operating activities and proceeds from
financing obligations (which generally represent landlord
reimbursements of construction costs) less acquisition of property
& equipment and capital lease & financing obligation
payments. Free cash flow should be evaluated in addition to, and
not considered a substitute for, other financial measures such as
net income and cash flow provided by operations. We believe that
free cash flow represents our ability to generate additional cash
flow from our business operations.
The following table reconciles net cash provided by operating
activities (a GAAP measure) to free cash flow (a non-GAAP measure)
for fiscal 2011.
(in millions) Net cash provided by operating activities $
2,143 Acquisition of property & equipment (927 ) Capital lease
& financing obligation payments (91 ) Proceeds from financing
obligations 14 Free cash flow $ 1,139
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 guidance on Kohl’s targeted sales, earnings and
other operating metrics. 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/A, 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
Based in Menomonee Falls, Wis., Kohl’s (NYSE: KSS) is a
family-focused, value-oriented specialty department store offering
moderately priced, exclusive and national brand apparel, shoes,
accessories, beauty and home products in an exciting shopping
environment. Kohl’s operates 1,127 stores in 49 states with a
commitment to environmental leadership. In support of the
communities it serves, Kohl’s has raised more than $208 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 a
list of store locations and information, or for the added
convenience of shopping online, visit www.Kohls.com.
KOHL'S CORPORATION CONSOLIDATED STATEMENTS OF INCOME
(In Millions, except per share data) (Unaudited) Subject to
Reclassification
Three
Months Twelve Months Ended Ended Jan.
28, Jan. 29,
Jan. 28, Jan. 29,
2012 2011
2012 2011 (Restated) Net sales
$ 6,018
$ 6,038
$ 18,804 $ 18,391 Cost of merchandise sold
3,841 3,815
11,625
11,359 Gross margin
2,177 2,223
7,179 7,032 Operating expenses: Selling, general and
administrative
1,178 1,173
4,243 4,190 Depreciation
and amortization
194 189
778 750 Operating income
805 861
2,158 2,092 Interest expense, net
76 71
299
304 Income before income taxes
729 790
1,859 1,788 Provision for income taxes
274
296
692 668
Net income
$ 455 $ 494
$ 1,167 $ 1,120 Basic net
income per share
$ 1.82 $ 1.68
$ 4.33 $
3.69 Average number of shares
251 295
270 304
Diluted net income per share
$ 1.81 $ 1.66
$
4.30 $ 3.66 Average number of shares
252 297
271 306
As a percent of net sales: Gross
margin
36.2 % 36.8 %
38.2 % 38.2 %
Selling, general and administrative expenses
19.6 %
19.4 %
22.6 % 22.8 % Operating income
13.4
% 14.3 %
11.5 % 11.4 % Net income
7.6
% 8.2 %
6.2 % 6.1 %
KOHL'S CORPORATION
CONSOLIDATED BALANCE SHEETS (Dollars In Millions)
(Unaudited) Subject to Reclassification
Jan. 28, Jan. 29,
2012 2011
Assets
Current assets: Cash and cash equivalents
$ 1,205 $
2,277 Merchandise inventories
3,199 3,036 Deferred income
taxes
72 77 Other
299 252 Total
current assets
4,775 5,642 Property and equipment,
net
8,905 8,692 Long-term investments
153 277 Other
assets
261 238 Total assets
$
14,094 $ 14,849
Liabilities and
Shareholders' Equity
Current liabilities: Accounts payable
$ 1,233
$ 1,138 Accrued liabilities
1,130 1,030 Income taxes payable
133 127 Current portion of long-term debt
- 400
Current portion of capital lease and financing obligations
94 86 Total current liabilities
2,590
2,781 Long-term debt
2,141 1,494 Capital lease and
financing obligations
2,009 2,018 Deferred income taxes
386 256 Other long-term liabilities
460 450
Shareholders' equity
6,508 7,850 Total
liabilities and shareholders' equity
$ 14,094 $
14,849
KOHL'S CORPORATION CONSOLIDATED STATEMENTS OF CASH
FLOWS (In Millions) (Unaudited) Subject to
Reclassification
2011 2010
Operating
activities Net income
$ 1,167 $ 1,120 Adjustments
to reconcile net income to net cash provided by operating
activities: Depreciation and amortization
778 750
Share-based compensation
57 66 Excess tax benefits from
share-based compensation
2 3 Deferred income taxes
144 39 Other non-cash revenues and expenses
39 35
Changes in operating assets and liabilities: Merchandise
inventories
(158 ) (107 ) Other current and long-term
assets
(42 ) (50 ) Accounts payable
96 (50 )
Accrued and other long-term liabilities
61 13 Income taxes
(1 ) (63 ) Net cash provided by
operating activities
2,143 1,756
Investing activities Acquisition of property and
equipment
(927 ) (801 ) Sales of investments in
auction rate securities
145 42 Other
(20
) 2 Net cash used in investing
activities
(802 ) (757 )
Financing activities Treasury stock purchases
(2,311
) (1,004 ) Long-term debt payments
(400 ) -
Capital lease and financing obligation payments
(91 )
(84 ) Proceeds from financing obligations
14 27 Proceeds
from issuance of debt
646 - Interest rate hedge payment
(48 ) - Deferred financing costs
(8 ) -
Proceeds from stock option exercises
58 75 Dividends paid
(271 ) - Excess tax benefits from share-based
compensation
(2 ) (3 ) Net cash
used in financing activities
(2,413 )
(989 ) Net (decrease) increase in cash and cash equivalents
(1,072 ) 10 Cash and cash equivalents at beginning of
year
2,277 2,267 Cash and
cash equivalents at end of year
$ 1,205 $
2,277
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