EX-99.1 2 exh991.htm PRESS RELEASE DATED MARCH 1, 2007 EXHIBIT 99.1

Exhibit 99.1



National & Retail Trades and First Call, Release: March 1, 2007 at 4:00 PM (EST)



KOHL'S CORPORATION REPORTS RECORD EARNINGS

FOR FOURTH QUARTER AND FISCAL 2006


·

Fourth Quarter Net Income Increase of 29.3% and EPS of $1.48 per Diluted Share


·

Fiscal 2006 Net Income Increase of 31.7% and EPS of $3.31 per Diluted Share



MENOMONEE FALLS, WI … March 1/BUSINESS WIRE/Kohl’s Corporation (NYSE:KSS). Kohl’s Corporation today reported record results for the three and twelve months ended February 3, 2007.


Fourth Quarter Results


Kohl’s Corporation reported a 29.3 percent increase in net income for the quarter ended February 3, 2007.  Net income was $484.6 million, or $1.48 per diluted share, compared with $374.9 million or $1.08 per diluted share a year ago.  Earnings per share increased 37% over the fourth quarter of fiscal 2005.  Net sales increased to $5.4 billion from $4.7 billion a year ago, an increase of 16.7 percent for the quarter.  On a comparable 13-week basis, comparable store sales increased 4.1 percent.


Fiscal 2006 consists of 53 weeks, resulting in a 14 week fiscal fourth quarter.  To provide a better measure of the Company’s business trends, the reported comparable store sales results for the quarter and the year compare the period ended January 27, 2007 to the period ended January 28, 2006.  The impact of the 53rd week on total sales was approximately $200 million.



2006 Fiscal Year Results


For the twelve months ended February 3, 2007, net income increased 31.7 percent to $1.1 billion or $3.31 per diluted share, compared with $842.0 million or $2.43 per diluted share a year ago.  Earnings per share increased 36% in fiscal 2006 versus fiscal 2005.  Net sales increased 16.0 percent to $15.5 billion from $13.4 billion a year ago.  On a comparable 52-week basis, comparable store sales increased 5.9 percent.


Larry Montgomery, Kohl’s chairman and chief executive officer, said, “We are very pleased with the top and bottom-line results for the quarter and the year as we delivered consistent sales performance across all regions and all lines of business.  We saw continued gross margin improvements as we benefited from improved inventory flow and allocation and increased penetration from our private and exclusive brands.  We achieved leverage on the expense line for the year while continuing to invest for our future growth.  In 2007, we will continue our focus on merchandise content, marketing, inventory management and the in-store shopping experience to drive in new customers and continue to take market share.”

Montgomery added, “I am very proud of our over 114,000 associates and the role they played in delivering another record year and want to thank them for their hard work, loyalty and dedication to serving our customers.  They are the reason you can continue to ‘expect great things’ from Kohl’s in 2007.”


Expansion Update


During the year, Kohl’s successfully opened 85 stores including entries into the Portland, OR, Seattle, WA and Tampa, FL markets.  The Company ended the year with 817 stores in 45 states, compared with 732 stores in 41 states at the end of 2005.

2007 Earnings Guidance


The Company issued its initial guidance for fiscal 2007.  Based on assumptions of a total sales increase of 9% to 11% and a comparable sales increase of 2% to 4%, the Company would expect earnings per diluted share of $3.68 to $3.84 for the year.  


Fourth Quarter Earnings Conference Call


Investors will have the opportunity to listen to the conference call scheduled for 5:00 PM EST on March 1 by dialing (913) 905-3179 (Pass Code: 6593348) ten minutes prior to the start of the call.  A replay of the conference call will be accessible for 30 days, from 8 PM EST March 1 through midnight March 30, 2007, by dialing (719) 457-0820 (Pass Code: 6593348).


In addition, the call will be web cast live over the Internet through the Company’s web site located at http://www.kohls.com (see “Investor Relations” / “Calendar of Events”), or through Premiere Global’s web site at https://cis.premconf.com/sc/scw.dll/usr?cid=vlllrcrxrddvwwzcd.  To listen to the call, please go to either web site at least 15 minutes early to register, download, and install any necessary audio software.  The web cast will be available for 30 days on both web sites.



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.  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 on Exhibit 99.1 to 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.

Investor Relations Contact: Wes McDonald, Chief Financial Officer, (262) 703-1893

Media Contact:

Vicki Shamion, Vice President – Public Relations, (262) 703-1464





KOHL'S CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In Millions, except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


February 3,

2007

(14 Weeks)



% to  Net Sales


January 28,

2006

(13 Weeks)



% to Net Sales

 

 

 

 

 

 

 

 

 

Net sales

 

$  5,430.8

 

 

 

 $ 4,651.9

 

 

Cost of merchandise sold

3,512.5

 

64.7%

 

    3,073.3

 

66.1%

 

 

 

 

 

 

 

 

 

Gross margin

 1,918.3

 

35.3%

 

1,578.6

 

33.9%

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

Selling, general and administrative

1,024.4

 

18.9%

 

       864.3

 

18.6%

Depreciation and amortization

104.0

 

1.9%

 

         91.2

 

1.9%

Preopening expenses

2.1

 

0.0%

 

1.5

 

0.0%

 

 

 

 

 

 

 

 

 

Operating income

787.8

 

14.5%

 

       621.6

 

13.4%

 

 

 

 

 

 

 

 

 

Interest expense, net

10.0

 

0.2%

 

         18.8

 

0.4%

 

 

 

 

 

 

 

 

 

Income before income taxes

777.8

 

14.3%

 

       602.8

 

13.0%

Provision for income taxes

293.2

 

5.4%

 

227.9

 

4.9%

 

 

 

 

 

 

 

 

 

Net income

 

$     484.6

 

8.9%

 

 $    374.9

 

8.1%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic net income per share

 $ 1.49

 

 

 

 $      1.09

 

 

Avg. number of shares

 

324.5

 

 

 

344.7

 

 

 

 

 

 

 

 

 

 

 

Diluted net income per share

 

$

1.48

 

 

 

 $      1.08

 

 

Avg. number of shares

 

327.8

 

 

 

346.6

 

 

 

 

 

 

 

 

 

 

 






KOHL'S CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In Millions, except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


February 3,

2007

(53 Weeks)



% to  Net Sales


January 28,

2006

(52 Weeks)



% to  Net

Sales

 

 

 

 

 

 

 

 

 

Net sales

 

$ 15,544.2

 

 

 

 $13,402.2

 

 

Cost of merchandise sold

 9,890.5

 

63.6%

 

    8,639.3

 

   64.5%

 

 

 

 

 

 

 

 

 

Gross margin

5,653.7

 

36.4%

 

4,762.9

 

35.5%

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

Selling, general and administrative

3,401.4

 

21.9%

 

2,963.5

 

22.1%

Depreciation and amortization

387.7

 

2.5%

 

338.9

 

2.5%

Preopening expenses

49.8

 

0.3%

 

44.3

 

0.3%

 

 

 

 

 

 

 

 

 

Operating income

1,814.8

 

11.7%

 

     1,416.2

 

10.6%

 

 

 

 

 

 

 

 

 

Interest expense, net

40.4

 

0.3%

 

          70.4

 

0.6%

 

 

 

 

 

 

 

 

 

Income before income taxes

1,774.4

 

11.4%

 

1,345.8

 

10.0%

Provision for income taxes

665.7

 

4.3%

 

       503.8

 

3.7%

 

 

 

 

 

 

 

 

 

Net income

 

$    1,108.7

 

7.1%

 

 $    842.0

 

6.3%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic net income per share

$        3.34

 

 

 

 $      2.45

 

 

Avg. number of shares

 

332.3

 

 

 

344.2

 

 

 

 

 

 

 

 

 

 

 

Diluted net income per share

 

$        3.31

 

 

 

 $      2.43

 

 

Avg. number of shares

 

334.8

 

 

 

346.8

 

 

 

 

 

 

 

 

 

 

 







Kohl's Corporation

Condensed Consolidated Statements of Cash Flows

(In Thousands)

Subject to Reclassification

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

February 3,

 2007

(53 Weeks)

 

January 28, 2006

(52 Weeks)

Operating activities

 

 

 

 

 

 

Net income

 

 

 

 

 $ 1,108,681

 

 $     841,960

Adjustments to reconcile net income to net cash

  provided by operating activities:

 

 

 

 

 

Depreciation and amortization

 

 

388,299

 

339,608

 

Amortization of debt discount

 

 

216

 

218

 

Deferred income taxes

 

 

9,216

 

18,793

 

Share-based compensation

 

44,699

 

43,941

 

Excess tax benefits from share-based compensation

 

(25,707)

 

(14,458)

 

Changes in operating assets and liabilities:

 

 

 

 

 

  Accounts receivable, net

 

 

1,652,065

 

(262,433)

 

  Merchandise inventories

 

 

(350,531)

 

(290,591)

 

  Other current and long-term assets

 

 

(63,781)

 

(20,095)

 

  Accounts payable

 

 

104,405

 

125,316

 

  Accrued and other long-term liabilities

 

139,754

 

95,203

 

  Income taxes

 

 

 

92,062

 

4,184

 

 

 

 

 

 

 

 

 

Net cash provided by operating activities

 

 

3,099,378

 

881,646

Investing activities

 

 

 

 

 

 

 

Acquisition of property and equipment

  and favorable lease rights

 

 

(1,142,247)

 


(828,095)

Purchases of short-term investments

 

 

(13,509,169)

 

(2,978,529)

Sales of short-term investments

 

 

     13,238,936

 

2,907,219

 Other

 

 

(6,856)

 

(4,333)


Net cash used in investing activities

 


(1,419,336)

 


(903,738)

Financing activities

 

 

 

 

 

 

Excess tax benefits from share-based compensation

 

 

25,707

 

14,458

Repayments of long-term debt  and capital leases, net

 

 

(109,596)

 

(5,102)

Treasury stock purchases

 

 

(1,628,416)

 

0

Net proceeds from issuances of common shares

 

 

94,594

 

22,858

 

 

 

 

 

 

 

 

 

Net cash (used in)  provided by financing activities

 

(1,617,711)

 

32,214

Net increase in cash and cash equivalents

 

62,331

 

10,122

Cash and cash equivalents at beginning of period

 

126,839

 

116,717

 

 

 

 

 

 

 

 

 

Cash and cash equivalents at end of period

 

 

$ 189,170

 

 $    126,839





Kohl's Corporation

Condensed Consolidated Balance Sheets

(In Thousands)

Subject to Reclassification

 

 

 

 

 

 

 

 

 


February 3,

2007

 


January 28,

2006

 

 

 

 

 

 

Assets

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

 $ 189,170

 

 $         126,839

Short-term investments

 

  431,230

 

160,077

Accounts receivable trade, net

 

  0

 

1,652,065

Merchandise inventories

 

 

  2,588,099

 

2,237,568

Deferred income taxes

 

 

  40,190

 

23,677

Other current assets

 

 

  152,351

 

           66,327

Total current assets

 

 

  3,401,040

 

       4,266,553

 

 

 

 

 

 

Property and equipment, net

 

  5,352,974

 

       4,616,303

Favorable lease rights, net

 

  219,286

 

          212,380

Goodwill

 

 

  9,338

 

             9,338

Other assets

 

 

  58,539

 

           48,920

Total assets

 

 

 $ 9,041,177

 

$    9,153,494

 

 

 

 

 

 

Liabilities and Shareholders' Equity

 

 

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Accounts payable

 

 

 $ 934,376

 

   $       829,971

Accrued liabilities

 

 

  732,178

 

642,091

Income taxes payable

 

 

  233,263

 

           166,908

Current portion of long-term debt and capital leases

 

  18,841

 

107,941

Total current liabilities

 

 

  1,918,658

 

         1,746,911

 

 

 

 

 

 

Long-term debt and capital leases

 

 

  1,040,057

 

       1,046,104

Deferred income taxes

 

 

  243,530

 

217,801

Other long-term liabilities

 

  235,537

 

185,340

Shareholders’ equity

 

 

  5,603,395

 

       5,957,338

Total liabilities and shareholders’ equity

 $ 9,041,177

 

 $    9,153,494