KOHLS Corp - FORM 8-K - EX-99.1 - PRESS RELEASE DATED AUGUST 13, 2015 - August 13, 2015

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Kohl's Corporation Reports Second Quarter Financial Results

MENOMONEE FALLS, Wis.--(BUSINESS WIRE)--August 13, 2015-- Kohl’s Corporation (NYSE:KSS). Kohl’s Corporation today reported results for the quarter and year-to-date period ended August 1, 2015.

 
Quarter
 
Year to Date
($ in millions)
2015
 
2014
 
Change
 
2015
 
2014
 
Change
Sales
$
4,267

 
$
4,242

 
0.6%
 
$
8,390

 
$
8,312

 
0.9%
Comparable store sales
0.1
%
 
(1.3
)%
 
-
 
0.8
%
 
(2.3
)%
 
-
Gross margin
38.9
%
 
39.0
 %
 
(6) bp
 
38.0
%
 
37.9
 %
 
5 bp
Net income
 
 
 
 
 
 
 
 
 
 
 
Reported
$
130

 
$
232

 
(44)%
 
$
257

 
$
357

 
(28)%
Excluding loss on
 
 

 
 
 
 
 

 
 
extinguishment of debt
$
211

 
$
232

 
(9)%
 
$
340

 
$
357

 
(5)%
Diluted earnings per share
 
 
 
 
 
 
 
 
 
 
 
Reported
$
0.66

 
$
1.13

 
(42)%
 
$
1.29

 
$
1.73

 
(25)%
Excluding loss on
 
 
 
 
 
 
 
 
 
 
 
extinguishment of debt
$
1.07

 
$
1.13

 
(5)%
 
$
1.70

 
$
1.73

 
(2)%

Kevin Mansell, Kohl's chairman, chief executive officer and president, said, "Our sales results were below our plan as the shift of sales in tax-free states from July into August was larger than anticipated.  Our expenses were well managed for the season.  Our inventory receipts are well-positioned for the back-to-school and fall seasons."

Dividend
On August 11, 2015, Kohl's Board of Directors declared a quarterly cash dividend on the Company's common stock of $0.45 per share.  The dividend is payable September 23, 2015 to shareholders of record at the close of business on September 9, 2015.

Store Update
Kohl’s ended the quarter with 1,164 stores in 49 states, compared with 1,160 stores at the same time last year.
 
Loss on Extinguishment of Debt and Guidance Update
As previously reported, the Company completed a cash tender offer for $767 million of debt.  In addition, the Company exercised its right to redeem $318 million of notes due in 2017 which were not initially tendered. The Company also issued $1.1 billion in new notes. In conjunction with the refinancing, the Company incurred a loss of approximately $170 million.  $131 million was recognized in the second quarter of fiscal 2015 and the Company expects an additional $39 million to be recognized in the third quarter of fiscal 2015 when the remaining 2017 notes are settled.




Absent the effect of the loss on the extinguishment of debt, the Company now expects its fiscal 2015 earnings per diluted share to be at the low range of its previous guidance of $4.40 to $4.60.

Second Quarter 2015 Earnings Conference Call




Kohl's will host its quarterly earnings conference call at 8:30 am ET on August 13, 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 for both the live call and the replay is 346895. 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 1,164 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.com and 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://www.youtube.com/Kohls)

Contacts
Investor Relations:
Wes McDonald, 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)
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Six Months Ended
 
August 1,
2015
 
August 2,
2014
 
August 1, 2015
 
August 2, 2014
Net sales
$
4,267

 
$
4,242

 
$
8,390

 
$
8,312

Cost of merchandise sold
2,605

 
2,588

 
5,206

 
5,162

 
 
 
 
 
 
 
 
Gross margin
1,662

 
1,654

 
3,184

 
3,150

 
 
 
 
 
 
 
 
Operating expenses:
 
 
 
 
 
 
 
Selling, general, and administrative
1,005

 
981

 
2,021

 
1,981

Depreciation and amortization
233

 
222

 
459

 
438

 
 
 
 
 
 
 
 
Operating income
424

 
451

 
704

 
731

 
 
 
 
 
 
 
 
Interest expense, net
84

 
85

 
168

 
170

 
 
 
 
 
 
 
 
Loss on extinguishment of debt
131

 
—

 
131

 
—

 
 
 
 
 
 
 
 
Income before income taxes
209

 
366

 
405

 
561

Provision for income taxes
79

 
134

 
148

 
204

 
 
 
 
 
 
 
 
Net income
$
130

 
$
232

 
$
257

 
$
357

 
 
 
 
 
 
 
 
Basic net income per share
$
0.66

 
$
1.14

 
$
1.30

 
$
1.74

Average number of shares
196

 
204

 
198

 
205

 
 
 
 
 
 
 
 
Diluted net income per share
$
0.66

 
$
1.13

 
$
1.29

 
$
1.73

Average number of shares
197

 
205

 
199

 
206

 
 
 
 
 
 
 
 
As a percent of net sales:
 
 
 
 
 
 
 
Gross margin
38.9
%
 
39.0
%
 
38.0
%
 
37.9
%
Selling, general and
 
 
 
 
 
 
 
administrative expenses
23.6
%
 
23.1
%
 
24.1
%
 
23.8
%
Operating income
9.9
%
 
10.6
%
 
8.4
%
 
8.8
%
Net income
3.0
%
 
5.5
%
 
3.1
%
 
4.3
%
 
 
 
 
 
 
 
 
Excluding loss on extinguishment of debt:
 
 
 
 
 
 
 
Net income
$
211

 
$
232

 
$
340

 
$
357

Diluted net income per share
$
1.07

 
$
1.13

 
$
1.70

 
$
1.73

Net income as a percent of net sales
5.0
%
 
5.5
%
 
4.1
%
 
4.3
%






KOHL'S CORPORATION
CONSOLIDATED BALANCE SHEETS
(In Millions)
(Unaudited)
 
 
 
 
 
 
 
August 1,
2015
 
August 2,
2014
Assets
 
 
 
 
Current assets:
 
 
 
 
  Cash and cash equivalents
 
$
934

 
$
746

  Merchandise inventories
 
4,252

 
3,899

  Deferred income taxes
 
130

 
132

  Other
 
310

 
323

 
 
 
 
 
  Total current assets
 
5,626

 
5,100

 
 
 
 
 
Property and equipment, net
 
8,528

 
8,686

Other assets
 
201

 
281

 
 
 
 
 
  Total assets
 
$
14,355

 
$
14,067

 
 
 
 
 
Liabilities and Shareholders' Equity
 
 
 
 
Current liabilities:
 
 
 
 
Accounts payable
 
$
1,566

 
$
1,479

Accrued liabilities
 
1,125

 
1,057

Income taxes payable
 
53

 
66

Current portion of long-term debt
 
317

 
—

Current portion of capital lease
 
 
 
 
  and financing obligations
 
117

 
105

 
 
 
 
 
  Total current liabilities
 
3,178

 
2,707

 
 
 
 
 
Long-term debt
 
2,791

 
2,778

Capital lease and financing obligations
 
1,821

 
1,896

Deferred income taxes
 
318

 
315

Other long-term liabilities
 
570

 
562

Shareholders' equity
 
5,677

 
5,809

 
 
 
 
 
  Total liabilities and shareholders' equity
 
$
14,355

 
$
14,067







KOHL'S CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Millions)
(Unaudited)
 
 
Six Months Ended
 
August 1,
2015
 
August 2,
2014
Operating activities
 
 
 
Net income
$
257

 
$
357

Adjustments to reconcile net income to net cash
 
 
 
provided by operating activities:
 
 
 
Depreciation and amortization
459

 
438

Share-based compensation
24

 
24

Excess tax benefits from share-based compensation
(10
)
 
(2
)
Deferred income taxes
(65
)
 
(17
)
Other non-cash revenues and expenses
17

 
11

Loss on extinguishment of debt
131

 
—

Changes in operating assets and liabilities:
 
 
 
Merchandise inventories
(433
)
 
(20
)
Other current and long-term assets
60

 
2

Accounts payable
55

 
114

Accrued and other long-term liabilities
(121
)
 
(103
)
Income taxes
(21
)
 
(74
)
Net cash provided by operating activities
353

 
730

 
 
 
 
Investing activities
 
 
 
Acquisition of property and equipment
(377
)
 
(374
)
Other
3

 
6

Net cash used in investing activities
(374
)
 
(368
)
 
 
 
 
Financing activities
 
 
 
Treasury stock purchases
(543
)
 
(392
)
Shares withheld for taxes on vested restricted shares
(23
)
 
(16
)
Dividends paid
(178
)
 
(160
)
Proceeds from issuance of debt
1,098

 
—

Deferred financing costs
(9
)
 
—

Reduction of long-term borrowings
(767
)
 
—

Premium paid on redemption of debt
(126
)
 
—

Capital lease and financing obligation payments
(54
)
 
(61
)
Proceeds from stock option exercises
140

 
37

Excess tax benefits from share-based compensation
10

 
2

Proceeds from financing obligations
—

 
3

Net cash used in financing activities
(452
)
 
(587
)
 
 
 
 
Net decrease in cash and cash equivalents
(473
)
 
(225
)
Cash and cash equivalents at beginning of period
1,407

 
971

Cash and cash equivalents at end of period
$
934

 
$
746



KOHLS Corp Reports