10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended August 4, 2018

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition period from ________ to _________

Commission file number 1-11084

KOHL’S CORPORATION

(Exact name of registrant as specified in its charter)

Wisconsin	39-1630919
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
N56 W17000 Ridgewood Drive, Menomonee Falls, Wisconsin	53051
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code (262) 703-7000

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes☒ No☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes☒No☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐*(Do not check if a smaller reporting company)	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards pursuant to Section 13(a) of the Exchange Act.   ☐

Indicate by a check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).     Yes☐  No☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: September 1, 2018 Common Stock, Par Value $0.01 per Share, 166,712,843 shares outstanding.

KOHL’S CORPORATION

INDEX

PART I	FINANCIAL INFORMATION
Item 1.	Financial Statements:
	Consolidated Balance Sheets	3
	Consolidated Statements of Income	4
	Consolidated Statement of Changes in Shareholders' Equity	5
	Consolidated Statements of Cash Flows	6
	Notes to Consolidated Financial Statements	7
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	14
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	18
Item 4.	Controls and Procedures	19
PART II	OTHER INFORMATION
Item 1A.	Risk Factors	19
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	19
Item 6.	Exhibits	21
Signatures		22

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

KOHL’S CORPORATION

CONSOLIDATED BALANCE SHEETS

(Unaudited)

(Dollars in Millions)	August 4, 2018			February 3, 2018			July 29, 2017
Assets				As Adjusted (a)			As Adjusted (a)
Current assets:
Cash and cash equivalents	$	1,066		$	1,308		$	552
Merchandise inventories		3,572			3,542			3,853
Other		404			530			381
Total current assets		5,042			5,380			4,786
Property and equipment, net		7,635			7,773			8,068
Other assets		238			236			230
Total assets	$	12,915		$	13,389		$	13,084
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable	$	1,404		$	1,271		$	1,370
Accrued liabilities		1,174			1,213			1,125
Income taxes payable		70			99			43
Current portion of capital lease and financing obligations		122			126			133
Total current liabilities		2,770			2,709			2,671
Long-term debt		2,273			2,797			2,796
Capital lease and financing obligations		1,537			1,591			1,637
Deferred income taxes		188			211			268
Other long-term liabilities		660			662			691
Shareholders’ equity:
Common stock		4			4			4
Paid-in capital		3,163			3,078			3,026
Treasury stock, at cost		(10,835	)		(10,651	)		(10,596	)
Accumulated other comprehensive loss		(8	)		(11	)		(12	)
Retained earnings		13,163			12,999			12,599
Total shareholders’ equity		5,487			5,419			5,021
Total liabilities and shareholders’ equity	$	12,915		$	13,389		$	13,084

(a) Refer to Note 2 for details on the adoption of the new revenue recognition accounting standard and the impact on previously reported results.

See accompanying Notes to Consolidated Financial Statements

3

KOHL’S CORPORATION

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

	Three Months Ended				Six Months Ended
(Dollars in Millions, Except per Share Data)	August 4, 2018		July 29, 2017		August 4, 2018		July 29, 2017
			As Adjusted (a)				As Adjusted (a)
Net sales	$	4,310	$	4,147	$	8,263	$	7,962
Other revenue		260		248		515		498
Total revenue		4,570		4,395		8,778		8,460
Cost of merchandise sold		2,605		2,525		5,101		4,953
Operating expenses:
Selling, general, and administrative		1,272		1,220		2,532		2,434
Depreciation and amortization		241		243		483		482
Operating income		452		407		662		591
Interest expense, net		65		75		135		150
Loss on extinguishment of debt		—		—		42		—
Income before income taxes		387		332		485		441
Provision for income taxes		95		124		117		167
Net income	$	292	$	208	$	368	$	274
Net income per share:
Basic	$	1.77	$	1.24	$	2.23	$	1.62
Diluted	$	1.76	$	1.24	$	2.21	$	1.62

(a) Refer to Note 2 for details on the adoption of the new revenue recognition accounting standard and the impact on previously reported results.

See accompanying Notes to Consolidated Financial Statements

4

KOHL’S CORPORATION

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY

(Unaudited)

	Common Stock						Treasury Stock						Accumulated Other Comprehensive Loss
(Dollars in Millions, Except per Share Data)	Shares		Amount		Paid-In Capital		Shares			Amount						Retained Earnings			Total
Balance at February 3, 2018 (previously reported)		373	$	4	$	3,078		(205	)	$	(10,651	)	$	(11	)	$	13,006		$	5,426
Change in accounting standard (a)		—		—		—		—			—			—			(7	)		(7	)
Balance at February 3, 2018 (as adjusted)		373		4		3,078		(205	)		(10,651	)		(11	)		12,999			5,419
Comprehensive income		—		—		—		—			—			3			368			371
Stock options and awards, net of tax		1		—		85		—			(21	)		—			—			64
Dividends paid ($1.22 per common share)		—		—		—		—			2			—			(204	)		(202	)
Treasury stock purchases		—		—		—		(2	)		(165	)		—			—			(165	)
Balance at August 4, 2018		374	$	4	$	3,163		(207	)	$	(10,835	)	$	(8	)	$	13,163		$	5,487

(a) Refer to Note 2 for details on the adoption of the new revenue recognition accounting standard and the impact on previously reported results.

See accompanying Notes to Consolidated Financial Statements

5

KOHL’S CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Six Months Ended
(Dollars in Millions)	August 4, 2018			July 29, 2017
Operating activities				As Adjusted (a)
Net income	$	368		$	274
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		483			482
Share-based compensation		50			21
Deferred income taxes		(25	)		(2	)
Loss on extinguishment of debt		42			—
Other non-cash revenues and expenses		13			(5	)
Changes in operating assets and liabilities:
Merchandise inventories		(24	)		(53	)
Accrued and other long-term liabilities		(88	)		(176	)
Accounts payable		133			(137	)
Other current and long-term assets		89			36
Income taxes		6			(64	)
Net cash provided by operating activities		1,047			376
Investing activities
Acquisition of property and equipment		(312	)		(399	)
Other		6			16
Net cash used in investing activities		(306	)		(383	)
Financing activities
Treasury stock purchases		(165	)		(250	)
Shares withheld for taxes on vested restricted shares		(21	)		(12	)
Dividends paid		(202	)		(186	)
Reduction of long-term borrowings		(528	)		—
Premium paid on redemption of debt		(35	)		—
Capital lease and financing obligation activity		(64	)		(67	)
Proceeds from stock option exercises		32			—
Net cash used in financing activities		(983	)		(515	)
Net decrease in cash and cash equivalents		(242	)		(522	)
Cash at beginning of period		1,308			1,074
Cash at end of period	$	1,066		$	552
Supplemental information
Interest paid, net of capitalized interest	$	141		$	146
Income taxes paid		164			233
Non-cash investing and financing activities
Property and equipment acquired through additional liabilities	$	7		$	37

(a) Refer to Note 2 for details on the adoption of the new revenue recognition accounting standard and the impact on previously reported results.

See accompanying Notes to Consolidated Financial Statements

6

KOHL’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Basis of Presentation

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for fiscal year end consolidated financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. For further information, refer to the consolidated financial statements and related footnotes included in our Annual Report on Form 10-K for the fiscal year ended February 3, 2018 (Commission File No. 1-11084) as filed with the Securities and Exchange Commission.

Due to the seasonality of our business, results for any quarter are not necessarily indicative of the results that may be achieved for a full fiscal year.

We operate as a single business unit.

The following table provides a brief description of issued, but not yet effective, accounting standards:

Standard	Description	Effect on our Financial Statements
Leases (ASC Topic 842) Issued February 2016 Effective Q1 2019	Among other things, the new standard requires us to recognize a right-of-use asset and a lease liability on our balance sheet for each lease.  It also changes the presentation and timing of lease-related expenses.	Approximately 5% of our store leases and all of our land leases are not currently recorded on our balance sheet.  Recording right-of-use assets and lease liabilities for these and other non-store leases is expected to have a material impact on our balance sheet.  We are also evaluating the impact that recording right-of-use assets and lease liabilities will have on our income statement and the financial statement impact that the standard will have on leases which are currently recorded on our balance sheet.

In 2017, we recorded provisional amounts for certain income tax effects of the Tax Cuts & Jobs Act (the “Act"), as addressed in Staff Accounting Bulletin No. 118 (“SAB 118”).  During the six months ended August 4, 2018, we made no adjustments to the previously recorded provisional amounts related to the Act.  Additional work is needed to finalize the income tax effects of the Act and we do not expect subsequent adjustments to be material.  Any such adjustments will be recorded as income tax expense in the period in which the adjustment is finalized.

2. Revenue Recognition

Effective February 4, 2018, we adopted Revenue from Contracts with Customers (ASC Topic 606) as required.  We adopted the new standard using the full retrospective method. The standard eliminated the transaction- and industry-specific revenue recognition guidance under prior U.S. GAAP and replaced it with a principles-based approach for revenue recognition and disclosures. Under the standard, revenue is recognized when a customer obtains controlof promised goods or services in an amount that reflects the consideration the entity expects to receive in exchange for those goods or services.

Net Sales

Net sales include revenue from the sale of merchandise and shipping revenues. Net sales are recognized when merchandise is received by the customer and we have fulfilled all performance obligations. We do not have any sales that are recorded as commissions.

7

KOHL’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The following table summarizes net sales by line of business for the periods ended August 4, 2018 and July 29, 2017:

	Three Months Ended				Six Months Ended
(Dollars in Millions)	August 4, 2018		July 29, 2017		August 4, 2018		July 29, 2017
Women's	$	1,439	$	1,398	$	2,694	$	2,633
Men's		955		890		1,745		1,625
Home		678		679		1,369		1,320
Children's		464		426		919		904
Footwear		445		415		871		815
Accessories		329		339		665		665
Net Sales	$	4,310	$	4,147	$	8,263	$	7,962

We maintain various rewards programs whereby customers earn rewards based on their spending and other promotional activities. The rewards are typically in the form of dollar off discounts which can be used on future purchases. These programs create performance obligations which require us to defer a portion of the original sale until the rewards are redeemed. Sales are recorded net of returns. At the end of each reporting period, we record a reserve based on historical return rates and patterns which reverses sales that we expect to be returned in the following period. Revenue from the sale of Kohl's gift cards is recognized when the gift card is redeemed. Liabilities for performance obligations resulting from our rewards programs, return reserves, and unredeemed gift cards and merchandise return cards totaled $358 million as of August 4, 2018, $422 million as of February 3, 2018 and $343 million as of July 29, 2017.

Net sales do not include sales tax as we are considered a pass-through conduit for collecting and remitting sales taxes.

Other Revenue

Other revenue consists primarily of revenue from our credit card operations, unused gift and merchandise return cards (breakage), and other non-merchandise revenues.

Revenue from credit card operations includes our share of the finance charges and interest fees, less charge-offs of the Kohl’s credit card pursuant to the Private Label Credit Card Program Agreement. Expenses related to our credit card operations are reported in SG&A.

Income from unused gift cards and merchandise return cards (breakage) is recorded in proportion and over the time period the cards are actually redeemed.

8

KOHL’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The following tables summarize the impact of adoption of the new standard by financial statement line item:

Three Months Ended July 29, 2017 (Dollars in Millions, Except per Share Data)	As Previously Reported		New Standard Adjustment		Adjusted
Net sales	$	4,144	$	3	$	4,147
Other revenue				248		248
Total revenue				251		4,395
Cost of merchandise sold		2,511		14		2,525
Gross margin		1,633
Operating expenses:
Selling, general and administrative		983		237		1,220
Depreciation and amortization		243		-		243
Operating income		407		-		407
Interest expense, net		75		-		75
Income before income taxes		332		-		332
Provision for income taxes		124		-		124
Net income	$	208	$	-	$	208
Net income per share:
Basic	$	1.24	$	-	$	1.24
Diluted	$	1.24	$	-	$	1.24

Six Months Ended July 29, 2017 (Dollars in Millions, Except per Share Data)	As Previously Reported		New Standard Adjustment			Adjusted
Net sales	$	7,987	$	(25	)	$	7,962
Other revenue				498			498
Total revenue				473			8,460
Cost of merchandise sold		4,956		(3	)		4,953
Gross margin		3,031
Operating expenses:
Selling, general and administrative		1,958		476			2,434
Depreciation and amortization		482		-			482
Operating income		591		-			591
Interest expense, net		150		-			150
Income before income taxes		441		-			441
Provision for income taxes		167		-			167
Net income	$	274	$	-		$	274
Net income per share:
Basic	$	1.62	$	-		$	1.62
Diluted	$	1.62	$	-		$	1.62

9

KOHL’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

July 29, 2017 (Dollars in Millions)	As Previously Reported		New Standard Adjustment			Adjusted
Assets
Current assets:
Cash and cash equivalents	$	552	$	-		$	552
Merchandise inventories		3,853		-			3,853
Other		335		46			381
Total current assets		4,740		46			4,786
Property and equipment, net		8,068		-			8,068
Other assets		230		-			230
Total assets	$	13,038	$	46		$	13,084
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable	$	1,370	$	-		$	1,370
Accrued liabilities		1,069		56			1,125
Income taxes payable		43		-			43
Current portion of capital lease and financing obligations		133		-			133
Total current liabilities		2,615		56			2,671
Long-term debt		2,796		-			2,796
Capital lease and financing obligations		1,637		-			1,637
Deferred income taxes		271		(3	)		268
Other long-term liabilities		691		-			691
Total shareholders’ equity		5,028		(7	)		5,021
Total liabilities and shareholders’ equity	$	13,038	$	46		$	13,084

10

KOHL’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

February 3, 2018 (Dollars in Millions)	As Previously Reported		New Standard Adjustment			Adjusted
Assets
Current assets:
Cash and cash equivalents	$	1,308	$	-		$	1,308
Merchandise inventories		3,542		-			3,542
Other		481		49			530
Total current assets		5,331		49			5,380
Property and equipment, net		7,773		-			7,773
Other assets		236		-			236
Total assets	$	13,340	$	49		$	13,389
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable	$	1,271	$	-		$	1,271
Accrued liabilities		1,155		58			1,213
Income taxes payable		99		-			99
Current portion of capital lease and financing obligations		126		-			126
Total current liabilities		2,651		58			2,709
Long-term debt		2,797		-			2,797
Capital lease and financing obligations		1,591		-			1,591
Deferred income taxes		213		(2	)		211
Other long-term liabilities		662		-			662
Total shareholders’ equity		5,426		(7	)		5,419
Total liabilities and shareholders’ equity	$	13,340	$	49		$	13,389

The adoption of the new standard had no impact on our basic or diluted earnings per share or our net cash provided by (used in) operating, financing, or investing activities.

3. Store Closure and Restructure Reserve

The following table summarizes changes in the store closure and restructure reserve during the six months ended August 4, 2018:

(Dollars in Millions)
Balance - February 3, 2018	$	87
Payments and reversals		(10	)
Balance - August 4, 2018	$	77

11

KOHL’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

4. Debt

Long-term debt consists of the following unsecured senior debt:

							Outstanding
Maturity (Dollars in Millions)	Effective Rate			Coupon Rate			August 4, 2018		February 3, 2018 & July 29, 2017
2021		4.81	%		4.00	%	$	413	$	650
2023		3.25	%		3.25	%		350		350
2023		4.78	%		4.75	%		184		300
2025		4.25	%		4.25	%		650		650
2029		7.36	%		7.25	%		42		99
2033		6.05	%		6.00	%		112		166
2037		6.89	%		6.88	%		101		150
2045		5.57	%		5.55	%		435		450
		4.76	%				$	2,287	$	2,815

Long-term debt is net of unamortized debt discounts and deferred financing costs of $14 million at August 4, 2018, $18 million at February 3, 2018, and $19 million at July 29, 2017.

Our long-term debt is classified as Level 1, financial instruments with unadjusted, quoted prices listed on active market exchanges. The estimated fair value of our long-term debt was $2.3 billion at August 4, 2018 and $2.9 billion at both February 3, 2018 and July 29, 2017.

Year to date, we have reduced our outstanding debt by $528 million, including $500 million which was repurchased pursuant to a cash tender offer in the first quarter and $28 million which was repurchased on the open market during the second quarter.  In conjunction with the debt reduction, we recorded a $42 million loss on extinguishment of debt which includes $35 million of premium paid to holders of the debt, $4 million related to an interest rate hedge, and $3 million of deferred financing fees and original issue discounts.

5. Stock-Based Compensation

The following table summarizes our stock-based compensation activity for the six months ended August 4, 2018:

	Stock Options					Nonvested Stock Awards					Performance Share Units
(Shares and Units in Thousands)	Shares			Weighted Average Exercise Price		Shares			Weighted Average Grant Date Fair Value		Units			Weighted Average Grant Date Fair Value
Balance - February 3, 2018		1,139		$	50.51		2,811		$	45.60		660		$	44.97
Granted		—			—		975			63.63		179			66.30
Exercised/vested		(959	)		50.49		(859	)		48.13		(38	)		78.35
Forfeited/expired		(2	)		53.38		(62	)		48.60		(5	)		46.91
Balance - August 4, 2018		178		$	51.36		2,865		$	50.94		796		$	48.17

6. Contingencies

We are subject to certain legal proceedings and claims arising out of the conduct of our business.  In the opinion of management, the outcome of these proceedings and litigation will not have a material adverse impact on our consolidated financial statements.

12

KOHL’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

7. Net Income Per Share

Basic net income per share is net income divided by the average number of common shares outstanding during the period. Diluted net income per share includes incremental shares assumed for share-based awards.

The information required to compute basic and diluted net income per share is as follows:

	Three Months Ended
(Dollar and Shares in Millions, Except per Share Data)	August 4, 2018		July 29, 2017
Numerator—Net income	$	292	$	208
Denominator—Weighted average shares:
Basic		165		168
Impact of dilutive stock-based awards		1		—
Diluted		166		168
Antidilutive shares		—		3
Net income per share:
Basic	$	1.77	$	1.24
Diluted	$	1.76	$	1.24

13

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

For purposes of the following discussion, unless noted, all references to "the quarter" and "the second quarter" are for the three fiscal months (13 weeks) ended August 4, 2018 and July 29, 2017. References to "year to date" and “first half” are for the six fiscal months (26 weeks) ended August 4, 2018 and July 29, 2017.  

The following discussion should be read in conjunction with our Consolidated Financial Statements and the related notes included elsewhere in this report, as well as the financial and other information included in our 2017 Annual Report on Form 10-K (our "2017 Form 10-K"). The following discussion may contain forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could materially differ from those discussed in these forward-looking statements.  Factors that could cause or contribute to those differences include, but are not limited to, those discussed elsewhere in this report and in our 2017 Form 10-K (particularly in "Risk Factors").

Executive Summary

As of August 4, 2018, we operated 1,158 Kohl's department stores, a website (www.Kohls.com), 12 FILA outlets, and four Off-Aisle clearance centers. Our Kohl's stores and website sell moderately-priced proprietary and national brand apparel, footwear, accessories, beauty and home products. Our Kohl's stores generally carry a consistent merchandise assortment with some differences attributable to local preferences. Our website includes merchandise which is available in our stores, as well as merchandise that is available only on-line.

Key financial results for the quarter included:

• Positive comparable sales results

• 42 basis point increase in gross margin as a percent of net sales

• SG&A as a percentage of total revenue deleveraged 9 basis points

• 8% reduction in inventory per store

• 42% increase in diluted earnings per share ("EPS")

See "Results of Operations" and "Liquidity and Capital Resources" for additional details about our financial results.

Results of Operations

Net Sales

Net sales increased $163 million, or 3.9%, to $4.3 billion for the second quarter of 2018. Year to date, net sales increased $301 million, or 3.8%.  On a shifted basis, which adjusts for the 53rd week in 2017 by comparing the periods ended August 4, 2018 and August 5, 2017, comparable sales increased 3.1% for the quarter and 1.8% year to date.  On a fiscal basis, which compares the fiscal periods ended August 4, 2018 and July 29, 2017, comparable sales increased 4.3% for the quarter and 4.0% year to date.  Kohl’s store sales are included in comparable sales after the store has been open for 12 full months.  Digital sales and sales at remodeled and relocated Kohl’s stores are included in comparable sales, unless square footage has changed by more than 10%.  

The following results are on a shifted comparable sales basis:

• The increase in comparable sales was driven by higher average transaction value in both periods.

• Our Footwear and Men’s businesses outperformed the Company average in both periods.  The Women’s business also outperformed the Company average in the second quarter.  Home was challenging in the second quarter, but outperformed the Company average year to date.

• All regions reported positive comparable sales in both periods.  The Midwest, South Central and West regions outperformed the Company average in both periods.  The MidAtlantic region also outperformed the Company average in the second quarter.

Other Revenue

Other revenue increased $12 million, or 5%, to $260 million for the second quarter of 2018 and $17 million, or 3%, to $515 million year to date.  The increases were primarily due to higher credit card revenue and unused gift card and merchandise return card revenue (breakage).

14

Cost of Merchandise Sold and Gross Margin

	Quarter								Year to Date
(Dollars in Millions)	2018			2017			Change		2018			2017			Change
Net sales	$	4,310		$	4,147		$	163	$	8,263		$	7,962		$	301
Cost of merchandise sold		2,605			2,525			80		5,101			4,953			148
Gross margin	$	1,705		$	1,622		$	83	$	3,162		$	3,009		$	153
Gross margin as a percent of net sales		39.5	%		39.1	%	42 bp			38.3	%		37.8	%	46 bp

Cost of merchandise sold includes the total cost of products sold, including product development costs, net of vendor payments other than reimbursement of specific, incremental and identifiable costs; inventory shrink; markdowns; freight expenses associated with moving merchandise from our vendors to our distribution centers; shipping expenses for on-line sales; and terms cash discount. Our cost of merchandise sold may not be comparable with that of other retailers because we include distribution center and buying costs in selling, general and administrative expenses while other retailers may include these expenses in cost of merchandise sold.  

The increase in gross margin as a percent of net sales reflects the benefits of our inventory management initiatives which contributed to less permanent and promotional markdowns and our operational efficiency initiative, which positively impacted shipping costs.    

Selling, General and Administrative Expenses ("SG&A")

	Quarter								Year to Date
(Dollars in Millions)	2018			2017			Change		2018			2017			Change
SG&A	$	1,272		$	1,220		$	52	$	2,532		$	2,434		$	98
As a percent of total revenue		27.8	%		27.8	%	9 bp			28.8	%		28.8	%	7 bp

SG&A expenses include compensation and benefit costs (including stores, headquarters, buying, and distribution centers); occupancy and operating costs of our retail, distribution and corporate facilities; freight expenses associated with moving merchandise from our distribution centers to our retail stores and among distribution and retail facilities; marketing expenses, offset by vendor payments for reimbursement of specific, incremental and identifiable costs; expenses related to our credit card operations; and other administrative revenues and expenses.  We do not include depreciation and amortization in SG&A. The classification of these expenses varies across the retail industry.  

The following table summarizes the increases in SG&A by expense type:

(Dollars in Millions)	Quarter		Year to Date
Technology	$	21	$	36
Store expenses		13		14
Leadership changes & other corporate costs		9		36
Marketing		6		7
Distribution costs		3		5
Total increase	$	52	$	98

Many of our expenses, including store payroll and distribution costs, are variable in nature. These costs generally increase as sales increase and decrease as sales decrease. We measure both the change in these variable expenses and the expense as a percent of sales. If the expense as a percent of sales decreased from the prior year, the expense "leveraged". If the expense as a percent of sales increased over the prior year, the expense "deleveraged".

For the quarter, all major expenses leveraged, except technology where we’re making deliberate investments in the cloud and other technology initiatives.  Year to date, our corporate expenses deleveraged primarily due to expenses associated with recent executive leadership changes.

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Other Expenses

	Quarter							Year to Date
(Dollars in Millions)	2018		2017		Change			2018		2017		Change
Depreciation and amortization	$	241	$	243	$	(2	)	$	483	$	482		$	1
Interest expense, net		65		75		(10	)		135		150			(15	)
Loss on extinguishment of debt		—		—		—			42		—			42

Depreciation and amortization decreased for the quarter as lower depreciation on our maturing store portfolio more than offset higher depreciation and amortization on our fifth E-commerce fulfillment center which opened in August 2017 and technology investments.

Interest expense, net decreased due to the benefits of this year’s debt tender transaction, as well as increased interest income due to higher yield and investment balances.  

We recognized a $42 million loss on extinguishment of debt in the first quarter of 2018 related to our $500 million cash tender offer.  

Income Taxes

	Quarter									Year to Date
(Dollars in Millions)	2018			2017			Change			2018			2017			Change
Provision for income taxes	$	95		$	124		$	(29	)	$	117		$	167		$	(50	)
Effective tax rate		24.5	%		37.4	%					24.2	%		37.9	%

The decreases in the provision for income taxes and the effective tax rate were primarily due to tax reform.

Income before Income Taxes, Net Income and Earnings Per Diluted Share

	2018						2017
(Dollars in Millions, Except per Share Data)	Income before Income Taxes		Net Income		Earnings Per Diluted Share		Income before Income Taxes		Net Income		Earnings Per Diluted Share
Quarter:
GAAP	$	387	$	292	$	1.76	$	332	$	208	$	1.24
Loss on extinguishment of debt		—		—		—		—		—		—
Adjusted (Non-GAAP)	$	387	$	292	$	1.76	$	332	$	208	$	1.24
Year to Date:
GAAP	$	485	$	368	$	2.21	$	441	$	274	$	1.62
Loss on extinguishment of debt		42		31		0.19		—		—		—
Adjusted (Non-GAAP)	$	527	$	399	$	2.40	$	441	$	274	$	1.62

We believe the adjusted results in the table above are useful because they provide enhanced visibility into our results excluding the loss on extinguishment of debt.  However, these non-GAAP financial measures are not intended to replace the comparable GAAP measures.

Seasonality and Inflation

Our business, like that of most retailers, is subject to seasonal influences, with the major portion of sales and income typically realized during the second half of each fiscal year, which includes the back-to-school and holiday seasons. Approximately 15% of annual sales typically occur during the back-to-school season and 30% during the holiday season. Because of the seasonality of our business, results for any quarter are not necessarily indicative of the results that may be achieved for a full fiscal year.

Although we expect that our operations will be influenced by general economic conditions, including food, fuel and energy prices, and by costs to source our merchandise, we do not believe that inflation has had a material

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effect on our results of operations for the periods covered by this report. However, there can be no assurance that our business will not be impacted by such factors in the future.

Liquidity and Capital Resources

The following table presents our primary uses and sources of cash.

Cash Uses	Cash Sources
•Operational needs, including salaries,         rent, taxes and other costs of running our business •Capital expenditures •Inventory •Dividend payments •Share repurchases •Debt reduction	•Cash flow from operations •Short-term trade credit, in the form of extended payment terms •Line of credit under our revolving credit facility

Our working capital and inventory levels typically build throughout the fall, peaking during the November and December holiday selling season.

							Increase/(Decrease) in Cash
(Dollars in Millions)	2018			2017			$			%
Net cash provided by (used in):
Operating activities	$	1,047		$	376		$	671			178	%
Investing activities		(306	)		(383	)		77			20	%
Financing activities		(983	)		(515	)		(468	)		(91	)%

Operating Activities

Operating activities generated $1.0 billion of cash in the first half of 2018, an increase of $671 million over the first half of 2017. The increase was primarily due to changes in accounts payable.

Investing Activities

Investing activities used cash of $306 million in the first half of 2018 and $383 million in the first half of 2017.  The decrease was primarily due to lower spending on E-commerce fulfillment centers and timing of technology spending.

Financing Activities

Financing activities used cash of $983 million in the first half of 2018, an increase of $468 million over the first half of 2017.

In the first six months of 2018, we reduced our outstanding debt by $528 million, including $500 million which was repurchased pursuant to a cash tender offer in the first quarter and $28 million which was repurchased on the open market during the second quarter.  We may again seek to retire or purchase our outstanding debt through open market cash purchases, privately negotiated transactions or otherwise. Such repurchases, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. 

We paid cash for treasury stock purchases of $165 million in the first half of 2018 and $250 million in the first half of 2017.  Share repurchases are discretionary in nature. The timing and amount of repurchases is based upon available cash balances, our stock price and other factors.

We paid cash dividends of $202 million ($1.22 per share) in the first half of 2018 and $186 million ($1.10 per share) in the first half of 2017.  On August 14, 2018, our Board of Directors declared a quarterly cash dividend on our common stock of $0.61 per share. The dividend is payable on September 26, 2018 to shareholders of record at the close of business on September 12, 2018.

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As of August 4, 2018, our credit ratings were as follows:

	Moody’s	Standard & Poor’s	Fitch
Long-term debt	Baa2	BBB-	BBB

Key Financial Ratios

Key financial ratios that provide certain measures of our liquidity are as follows:

(Dollars in Millions)	August 4, 2018			July 29, 2017
Working capital	$	2,272		$	2,115
Current ratio		1.82			1.79
Debt/capitalization		41.7	%		47.6	%

The increases in our working capital and current ratio include a $514 million increase in cash despite $528 million in debt reductions during the first six months of 2018.  The increases were attributable to cash, but were partially offset by a $281 million reduction in inventory as a result of our inventory management initiatives.  The debt/capitalization ratio reflects the benefit of lower debt outstanding.

Inventory per store as of August 4, 2018 decreased 8% from July 29, 2017.  Accounts payable as a percent of inventory increased 375 basis points to 39.3% at August 4, 2018.  Both were driven by our inventory management initiatives.

Debt Covenant Compliance

As of August 4, 2018, we were in compliance with all debt covenants and expect to remain in compliance during the remainder of fiscal 2018.  

Contractual Obligations

Aside from the $528 million reduction in outstanding debt and the resulting decline in our interest expense, there have been no significant changes in the contractual obligations disclosed in our 2017 Form 10-K.

Off-Balance Sheet Arrangements

We have not provided any financial guarantees as of August 4, 2018.

We have not created, and are not party to, any special-purpose or off-balance sheet entities for the purpose of raising capital, incurring debt or operating our business. We do not have any arrangements or relationships with entities that are not consolidated into our financial statements that are reasonably likely to materially affect our financial condition, liquidity, results of operations or capital resources.

Critical Accounting Policies and Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires us to make estimates and assumptions that affect reported amounts. Management has discussed the development, selection and disclosure of its estimates and assumptions with the Audit Committee of our Board of Directors. There have been no significant changes in the critical accounting policies and estimates discussed in our 2017 Form 10-K.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk

There have been no significant changes in the market risks described in our 2017 Form 10-K.

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Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (the “Evaluation”) at a reasonable assurance level as of the last day of the period covered by this report.

Based upon the Evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures are effective at the reasonable assurance level. Disclosure controls and procedures are defined by Rule 13a-15(e) of the Securities Exchange Act of 1934 (the "Exchange Act") as controls and other procedures that are designed to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified by the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosures.

It should be noted that the design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving our stated goals under all potential future conditions, regardless of how remote.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting during the quarter ended August 4, 2018 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1A. Risk Factors

There have been no significant changes in the risk factors described in our 2017 Form 10-K.

This Form 10-Q contains "forward-looking statements" made within the meaning of the Private Securities Litigation Reform Act of 1995.  Words such as "believes," “anticipates,” “plans,” "may," "intends," "will," "should," “expects” and similar expressions are intended to identify forward-looking statements.  Forward-looking statements may include comments about our future sales or financial performance and our plans, performance, and other objectives, expectations or intentions, such as statements regarding our liquidity, debt service requirements, planned capital expenditures, future store initiatives, and adequacy of capital resources and reserves. Forward-looking statements are based on our management’s then current views and assumptions and, as a result, are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected. Any such forward-looking statements are qualified by the important risk factors described in Part I, Item 1A of our 2017 Form 10-K or disclosed from time to time in our filings with the SEC, that could cause actual results to differ materially from those predicted by the forward-looking statements. Forward-looking statements relate to the date initially made, and we undertake no obligation to update them.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

We did not sell any securities during the quarter ended August 4, 2018, which were not registered under the Securities Act of 1933, as amended.

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The following table contains information for shares of common stock repurchased and shares acquired from employees in lieu of amounts required to satisfy minimum tax withholding requirements upon the vesting of the employees’ stock-based compensation during the three fiscal months ended August 4, 2018:

	Total Number of Shares Purchased		Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (In Millions)
May 6 - June 2, 2018		523,302	$	63.18		444,969	$	1,505
June 3 - July 7, 2018		501,341		74.51		499,235		1,467
July 8 - August 4, 2018		421,978		72.08		419,848		1,437
Total		1,446,621	$	70.10		1,364,052	$	1,437

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Item 6. Exhibits

Exhibit	Description
10.1	Employment agreement between Kohl’s Department Stores, Inc. and Kohl’s Corporation and Doug Howe effective as of May 14, 2018.*
31.1	Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema
101.CAL	XBRL Taxonomy Extension Calculation Linkbase
101.DEF	XBRL Taxonomy Extension Definition Linkbase
101.LAB	XBRL Taxonomy Extension Label Linkbase
101.PRE	XBRL Taxonomy Extension Presentation Linkbase
	*A management contract or compensatory plan or arrangement.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	Kohl’s Corporation (Registrant)
Date: September 7, 2018	/s/ Bruce Besanko
	Bruce Besanko On behalf of the Registrant and as Chief Financial Officer (Principal Financial Officer)

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EX-10.1

Exhibit 10.1

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (“Agreement”) is executed as of this 14^th day of May, 2018, by and between Kohl’s Department Stores, Inc. and Kohl’s Corporation (collectively referred to in this Agreement as “Company”) and Doug Howe (“Executive”).

The Company desires to employ Executive, and Executive desires to be employed by the Company, on the terms and conditions set forth herein.

The parties believe it is in their best interests to make provision for certain aspects of their relationship during and after the period in which Executive is employed by the Company.

NOW, THEREFORE, in consideration of the premises and the mutual agreements and covenants contained herein, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by the Company and Executive (the “Parties”), the Parties agree as follows:

ARTICLE I

EMPLOYMENT

1.1Term of Employment.  The Company employs Executive, and Executive accepts employment by the Company, for the three (3) year period commencing on May 14, 2018 (the “Initial Term”), subject to earlier termination as hereinafter set forth in Article III, below.  This Agreement shall be automatically extended for one (1) day each day during the term (the Initial Term as so extended, the “Renewal Term”) unless the Company shall give the Executive written notice of intention not to renew, in which case this Agreement shall terminate as of the end of the Initial Term or said Renewal Term, as applicable or unless this Agreement is earlier terminated as set forth in Article III, below.  If this Agreement is extended, the terms of this Agreement during such Renewal Term shall be the same as the terms in effect immediately prior to such extension (including the early termination provisions set forth in Article III, below), subject to any such changes or modifications as mutually may be agreed between the Parties as evidenced in a written instrument signed by both the Company and Executive.  If Executive’s employment is terminated for any reason specified in Section 3.1, below, after Company has provided a notice of non-renewal under this Section 1.1, such termination will be treated as a termination under the applicable provision of Section 3.1 and not as a termination due to non-renewal under this Section 1.1.  

1.2Position and Duties.  Executive shall be employed in the position of Chief Merchandising Officer, and shall be subject to the authority of, and shall report to, the Company’s Chief Executive Officer and/or Board of Directors (the “Board”).  Executive’s duties and responsibilities shall include all those customarily attendant to the position of Chief Merchandising Officer and such other duties and responsibilities as may be assigned from time to time by Executive’s supervisor and/or the Company’s Board.  Executive shall devote Executive’s entire business time, attention and energies exclusively to the business interests of the Company while employed by the Company except as otherwise specifically approved in writing by Executive’s supervisor and/or the Company’s Board.  During the Initial Term and

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the Renewal Term, Executive may not participate on the board of directors or any similar governing body of any for-profit entity other than the Company, unless first approved in writing by the Company’s Board.  

ARTICLE II

COMPENSATION AND OTHER BENEFITS

2.1Base Salary.  During the Initial Term and the Renewal Term, the Company shall pay Executive an annual base salary as described in Exhibit A (a copy of which is attached hereto and incorporated herein), payable in accordance with the normal payroll practices and schedule of the Company (“Base Salary”).  The Base Salary shall be subject to adjustment from time to time as determined by the Board.

2.2Benefit Plans and Fringe Benefits.  During the Initial Term and the Renewal Term, Executive will be eligible to participate in the plans, programs and policies including, without limitation, group medical insurance, fringe benefits, paid vacation, expense reimbursement and incentive pay plans, which the Company makes available to senior executives of the Company in accordance with the eligibility requirements, terms and conditions of such plans, programs and policies in effect from time to time.  Executive acknowledges and agrees that the Company may amend, modify or terminate any of such plans, programs and policies at any time at its discretion.

2.3Equity Plans or Programs.  During the Initial Term and the Renewal Term, Executive may be eligible to participate in stock option, phantom stock, restricted stock or other similar equity incentive plans or programs which the Company may establish from time to time.  The terms of any such plans or programs, and Executive’s eligibility to participate in them, shall be established by the Board at its sole discretion.  Executive acknowledges and agrees that the Company may amend, modify or terminate any of such plans or programs at any time at its discretion.

In no event will the reimbursements or in-kind benefits to be provided by the Company pursuant to this Agreement in one taxable year affect the amount of reimbursements or in-kind benefits to be provided in any other taxable year, nor will Executive’s right to reimbursement or in-kind benefits be subject to liquidation or exchange for another benefit.  Further, any reimbursements to be provided by the Company pursuant to this Agreement shall be paid to the Executive no later than the calendar year following the calendar year in which the Executive incurs the expenses.

ARTICLE III

TERMINATION

3.1Right to Terminate; Automatic Termination.

(a)Termination Without Cause.  Subject to Section 3.2, below, the Company may terminate Executive’s employment and all of the Company’s obligations under this

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Agreement at any time and for any reason.

(b)Termination For Cause.  Subject to Section 3.2, below, the Company may terminate Executive’s employment and all of the Company’s obligations under this Agreement at any time for Cause (defined below) by giving notice to Executive stating the basis for such termination, effective immediately upon giving such notice or at such other time thereafter as the Company may designate.  “Cause” shall mean any of the following:  (i) Executive’s continuous failure to substantially perform Executive’s duties after a written demand for substantial performance is delivered to Executive that specifically identifies the manner in which the Company believes that Executive has not substantially performed his/her duties, and Executive has failed to demonstrate substantial efforts to resume substantial performance of Executive’s duties on a continuous basis within thirty (30) calendar days after receiving such demand; (ii) Executive’s violation of a material provision of “Kohl’s Ethical Standards and Responsibilities” which is materially injurious to the Company, monetarily or otherwise; (iii) any dishonest or fraudulent conduct which results, or is intended to result, in gain to Executive or Executive’s personal enrichment at the expense of the Company; or (iv) any material breach of this Agreement by Executive after a written notice of such breach is delivered to Executive that specifically identifies the manner in which the Company believes that Executive has breached this Agreement, and Executive has failed to cure such breach within thirty (30) calendar days after receiving such demand; provided, however, that no cure period shall be required for breaches of Articles IV, V, VI or VII, below, of this Agreement; or (vi) conviction of Executive, after all applicable rights of appeal have been exhausted or waived, of any crime.  Notwithstanding the conviction of a crime as described in the preceding subsection (vi), the Board, in its sole discretion, may waive such termination in the event it determines that such crime does not discredit the Company or is not detrimental to the Company's reputation or goodwill, and any decision by the Board with respect to such waiver shall be final.

(c)Termination for Good Reason.  Subject to Section 3.2, below, Executive may terminate Executive’s employment and all of the Company’s obligations under this Agreement at any time for Good Reason (defined below) by giving written notice to the Company stating the basis for such termination, effective immediately upon giving such notice.  “Good Reason” shall mean any of the following: (i) the Company gives Executive written notice of non-renewal pursuant to Section 1.1; (ii) a material reduction in Executive’s status, title, position, responsibilities or Base Salary; (iii) any material breach by the Company of this Agreement; (iv) any purported termination of the Executive’s employment for Cause which does not comply with the terms of this Agreement; or (v) a mandatory relocation of Executive’s employment with the Company from the Milwaukee, Wisconsin area, except for travel reasonably required in the performance of Executive’s duties and responsibilities.  Notwithstanding the foregoing, no termination shall be for Good Reason unless Executive has provided the Company with written notice of the conduct alleged to have caused Good Reason within thirty (30) calendar days of such conduct and at least thirty (30) calendar days have elapsed after the Company’s receipt of such written notice from Executive, during which the Company has failed to demonstrate substantial efforts to cure any such alleged conduct.

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(d)Termination by Death or Disability.  Subject to Section 3.2, below, Executive’s employment and the Company’s obligations under this Agreement shall terminate automatically, effective immediately and without any notice being necessary, upon Executive’s death or a determination of Disability of Executive.  For purposes of this Agreement, “Disability” means the Executive: (i) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, or (ii) has been, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, receiving income replacement benefits for a period of not less than three (3) months under an accident and health plan covering employees of the Company.   A determination of Disability shall be made by the Company, which may, at its sole discretion, consult with a physician or physicians satisfactory to the Company, and Executive shall cooperate with any efforts to make such determination.  Any such determination shall be conclusive and binding on the parties.  Any determination of Disability under this Section 3.1(d) is not intended to alter any benefits any party may be entitled to receive under any disability insurance policy carried by either the Company or Executive with respect to Executive, which benefits shall be governed solely by the terms of any such insurance policy.

(e)Termination by Resignation.  Subject to Section 3.2, below, Executive’s employment and the Company’s obligations under this Agreement shall terminate automatically, effective immediately upon Executive’s provision of written notice to the Company of Executive’s resignation from employment with the Company or at such other time as may be mutually agreed between the Parties following the provision of such notice.

(f)Separation of Service.  A termination of employment under this Agreement shall only occur to the extent Executive has a “separation from service” from Company in accordance with Section 409A of the Code.  Under Section 409A, a “separation from service” occurs when Executive and the Company reasonably anticipate that no further services will be performed by Executive after a certain date or that the level of bona fide services Executive would perform after such date (whether as an employee or as a consultant) would permanently decrease to no more than 20 percent of the average level of bona fide services performed by Executive over the immediately preceding 36-month period.

3.2Rights Upon Termination.

(a)Termination By Company for Cause, By Company’s Non-Renewal or By Executive Due to Resignation Other Than For Good Reason .  If Executive’s employment is terminated by the Company pursuant to Section 3.1(b), above, by the Company due to non-renewal pursuant to Section 1.1, above, or by Executive pursuant to Section 3.1(e), above, Executive shall have no further rights against the Company hereunder, except for the right to receive (i) any unpaid Base Salary with respect to the period prior to the effective date of termination together with payment of any vacation that Executive has accrued but not used through the date of termination; (ii) reimbursement of expenses to which Executive is entitled

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under Section 2.2, above; and (iii) Executive’s unpaid bonus, if any, attributable to any complete fiscal year of the Company ended before the date of termination (in the aggregate, the “Accrued Benefits”).  Any such bonus payment shall be made at the same time as any such bonus is paid to other similarly situated executives of the Company.  Furthermore, under this Section 3.2(a), vesting of any Company stock options granted to Executive ceases on the effective date of termination, and any unvested stock options lapse and are forfeited immediately upon the effective date of termination.

(b)Termination Due to Executive’s Death.   If Executive’s employment is terminated due to Executive’s death pursuant to Section 3.1(d), above, Executive shall have no further rights against the Company hereunder, except for the right to receive (i) Accrued Benefits; (ii) Health Insurance Continuation (defined below); and (iii) a share of any bonus attributable to the fiscal year of the Company during which the effective date of termination occurs determined as follows: the product of (x) the average bonuses paid or payable, including any amounts that were deferred in respect of the three (3) fiscal years immediately preceding the fiscal year in which the effective date of termination occurs and (y) a fraction, the numerator of which is the number of days completed in the fiscal year in which the effective date of termination occurs through the effective date of termination and the denominator of which is three hundred sixty-five (365) (the “Historic Pro Rata Bonus”).  The Pro Rata Bonus or  the Historic Pro Rata Bonus shall be paid at the same time as any such bonuses are paid to other similarly situated executives of the Company.  Upon termination due to  the Executive’s death, Executive shall also be entitled to a severance payment equal to fifty percent (50%) of Executive’s Base Salary payable for one (1) year following the effective date of termination pursuant to normal payroll practices.  Furthermore, under this Section 3.2(b), if Executive’s termination is due to Executive’s death, all Company stock options granted to Executive shall immediately vest upon the date of Executive’s death.

(c)Termination Due to Disability.  If Executive’s employment is terminated due to Executive’s Disability pursuant to Section 3.1(d), above, Executive shall have no further rights against the Company hereunder, except for the right to receive (i) Accrued Benefits; (ii) Health Insurance Continuation (defined below); (iii) the Historic Pro Rata Bonus; and (iv) a Severance Benefit.  The Historic Pro Rata Bonus payment shall be made at the same time as any such bonuses are paid to other similarly situated executives of the Company.  For purposes of this Section 3.2(c), “Severance Benefit” means six (6) months of Base Salary, payable in equal installments during the six (6) month period following Executive’s exhaustion of any short-term disability benefits provided by the Company, in accordance with the normal payroll practices and schedule of the Company.  The amount of such Severance Benefit shall be reduced by any compensation (including any payments from the Company or any benefit plans, policies or programs sponsored by the Company) earned or received by Executive during the six (6) month period following the date of termination and the six (6) month period during which Executive receives the Severance Benefit, and Executive agrees to reimburse the Company for the amount of any such reduction.  Executive acknowledges and agrees that, upon the cessation, if any, of such Disability during the period of the payment of the Severance Benefit, he/she has an obligation to use his/her reasonable efforts to secure other employment consistent with Executive’s status and experience and that his/her failure to do so, as determined at the sole

5

discretion of the Board, is a breach of this Agreement.  Furthermore, under this Section 3.2(c), vesting of any Company stock options granted to Executive shall cease on the effective date of termination, and any unvested stock options shall lapse and be forfeited as of such date.

(d)Termination By Company Without Cause or By Executive for Good Reason.

i.No Change of Control.  If Executive’s employment is terminated by the Company pursuant to Section 3.1(a), above, or by Executive pursuant to Section 3.1(c), above, and such termination does not occur three (3) months prior to or within one (1) year after the occurrence of a Change of Control (defined below), Executive shall have no further rights against the Company hereunder, except for the right to receive (A) Accrued Benefits; (B) a Severance Payment (defined below); (C) the Pro Rata Bonus (defined below); provided, however, that the Pro Rata Bonus payment shall be made at the same time as any such bonuses are paid to other similarly situated executives of the Company; (D) outplacement services from an outplacement service company of the Company’s choosing at a cost not to exceed Twenty Thousand Dollars ($20,000.00), payable directly to such outplacement service company (“Outplacement Services”); and (E) Health Insurance Continuation (defined below).  

For purposes of this Section 3.2(d)(i), “Severance Payment” means an amount equal to the sum of:

(x) Executive’s Base Salary for the remainder of the then current Initial Term or Renewal Term of this Agreement, but not to exceed two and nine-tenths (2.9) years; plus

(y) an amount equal to the average (calculated at the sole discretion of the Company) of bonuses paid or payable, including any amounts that were deferred, in respect of the three (3) fiscal years immediately preceding the fiscal year in which the effective date of termination occurs.   

The Severance Payment shall be paid to Executive in a lump sum within forty (40) days after the effective date of termination, subject to Section 3.2(e) below.

For purposes of this Section 3.2(d)(i), the “Pro Rata Bonus” means an amount equal to the product of:

(x) the bonus attributable to the fiscal year of the Company during which the Executive’s termination occurs equal in amount to the bonus the Executive would have received for the full fiscal year had the Executive’s employment not terminated and determined, where applicable, by taking into account the actual performance of the Company at year-end; and

(y) a fraction, the numerator of which is the number of days completed in the

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fiscal year in which the effective date of termination occurs through the effective date of termination and the denominator of which is three hundred sixty-five (365).   

Furthermore, under this Section 3.2(d)(i), vesting of any Company stock options granted to Executive prior to the date of termination shall continue as scheduled until the term of this Agreement expires, after which such vesting ceases and any unvested stock options lapse and are forfeited.

ii.Change of Control.  If Executive’s employment is terminated by the Company pursuant to Section 3.1(a), above, or by the Executive pursuant to Section 3.1(c), above, and such termination occurs within three (3) months prior to or one (1) year after the occurrence of a Change of Control (defined below), Executive shall have no further rights against the Company hereunder, except for the right to receive (A) Accrued Benefits; (B) a Severance Payment (defined below); (C) the Historic Pro Rata Bonus; provided, however, that such bonus payments shall be made at the same time as any such bonuses are paid to other similarly situated executives of the Company; (D) Health Insurance Continuation (defined below) for the period of time equal to the remainder of the then-current Renewal Term, but not to exceed two and nine-tenths (2.9) years following the effective date of Executive’s termination; and (E) Outplacement Services.  

For purposes of this Section 3.2(d)(ii), “Severance Payment” means an amount equal to the sum of:

(x) Executive’s Base Salary for the period of time equal to the remainder of the then-current Renewal Term, but not to exceed two and nine-tenths (2.9) years; plus

(y) an amount equal to the average (calculated at the sole discretion of the Company) of bonuses paid or payable, including any amounts that were deferred, in respect of the three (3) fiscal years immediately preceding the fiscal year in which the effective date of termination occurs, times the number of years, rounded to the nearest tenth, remaining in the then-current Renewal Term, but not to exceed two and nine-tenths (2.9).  

The Severance Payment shall be paid to Executive in a lump sum within forty (40) days after the effective date of termination, subject to Section 3.2(e) below.

Furthermore, under this Section 3.2(d)(ii), vesting of any Company stock options granted to Executive prior to termination shall occur immediately upon the date of termination.

iii.Definition – Change of Control.  “Change of Control” means the occurrence of (1) the acquisition (other than from the Company) by any person, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act

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of 1934, as amended (“Exchange Act”)), other than the Company, a subsidiary of the Company or any employee benefit plan or plans sponsored by the Company or any subsidiary of the Company, directly or indirectly, of beneficial ownership (within the meaning of Exchange Act Rule 13d-3) of thirty-three percent (33%) or more of the then outstanding shares of common stock of the Company or voting securities representing thirty-three percent (33%) or more of the combined voting power of the Company’s then outstanding voting securities ordinarily entitled to vote in the election of directors unless the Incumbent Board (defined below), before such acquisition or within thirty (30) days thereafter, deems such acquisition not to be a Change of Control; or (2) individuals who, as of the date of this Agreement, constitute the Board (as of such date, “Incumbent Board”) ceasing for any reason to constitute at least a majority of such Board; provided, however, that any person becoming a director subsequent to the date of this Agreement whose election, or nomination for election by the shareholders of the Company, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be for purposes of this Agreement, considered as though such person were a member of the Incumbent Board but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest which was (or, if threatened, would have been) subject to Exchange Act Rule 14a-12(c); or (3) the consummation of any merger, consolidation or share exchange of the Company with any other corporation, other than a merger, consolidation or share exchange which results in more than sixty percent (60%) of the outstanding shares of the common stock, and voting securities representing more than sixty percent (60%) of the combined voting power of then outstanding voting securities entitled to vote generally in the election of directors, of the surviving, consolidated or resulting corporation being then beneficially owned, directly or indirectly, by the persons who were the Company’s shareholders immediately prior to such transaction in substantially the same proportions as their ownership, immediately prior to such transaction, of the Company’s then outstanding Common Stock or then outstanding voting securities, as the case may be; or (4) the consummation of any liquidation or dissolution of the Company or a sale or other disposition of all or substantially all of the assets of the Company.

Following the occurrence of an event which is not a Change of Control whereby there is a successor company to the Company, or if there is no such successor whereby the Company is not the surviving corporation in a merger or consolidation, the surviving corporation or successor holding company (as the case may be), for purposes of this Agreement, shall thereafter be referred to as the Company.

iv.Definition – Health Insurance Continuation.  For purposes of Sections 3.2 (b), 3.2 (c), 3.2(d)(i) and 3.2(d)(ii) above, the term “Health Insurance Continuation” means that, in the event the Executive's employment with the Company is terminated for any reason other than (A) a termination for Cause, (B) the Company’s non-renewal, or (C) a voluntary termination by the Executive for any reason other than "Good Reason" or other than approved by the Board of Directors of the Company, the Company shall continue to provide health insurance and a supplemental executive medical plan, as applicable, with coverage for Executive and Executive’s dependants

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eligible for coverage under such insurance and medical plans (the “Executive’s Eligible Dependants”), substantially the same as that covering Executive and Executive’s Eligible Dependants as of the date of the effective date of termination (collectively the “Health Insurance Benefits”).   In the event of Executive’s death, the Health Insurance Benefits shall continue to be provided to Executive’s Eligible Dependants, in each case for as long as each individual would have continued to qualify as an eligible dependant under the terms of the applicable insurance and medical plans had Executive been living. The Company’s responsibility to provide Health Insurance Continuation shall at all times be contingent upon:

(1) The Health Insurance Benefits being reasonably available to the Company with respect to Executive and Executive’s Eligible Dependants, as the case may be; and

(2) Following the termination of Executive’s employment with the Company, Executive or Executive’s Eligible Dependants, as the case may be, shall reimburse the Company for all premiums paid for Executive’s Health Insurance Benefits, as determined by the Company in good faith from time to time.  The Company shall provide Executive a quarterly invoice for such reimbursement, and amounts due hereunder may be withheld from other amounts payable to Executive. 

Any Health Insurance Continuation provided for herein will cease forever on the date on which Executive becomes eligible for health insurance coverage under another employer’s group health insurance plan, and, within five (5) calendar days of Executive becoming eligible for health insurance coverage under another employer’s group health insurance plan, Executive agrees to inform the Company of such fact in writing.

In no event will the Health Insurance Continuation to be provided by the Company pursuant to this Agreement in one taxable year affect the amount of Health Insurance Continuation to be provided in any other taxable year, nor will Executive’s right to Health Insurance Continuation be subject to liquidation or exchange for another benefit.

(e)Delay of Payments if Required by Section 409A.  If amounts paid to Executive pursuant to any Subsection of Section 3.2 would be subject to a penalty under Section 409A of the Internal Revenue Code because Executive is a “specified employee” within the meaning of Section 409A(a)(2)(B)(i), such payments will be delayed until a date which is six (6) months after Executive’s termination of employment, at which point any such delayed payments will be paid to Executive in a lump sum.  

(f)Other Equity Awards.  Future vesting of any equity awards not specifically addressed in this Section 3.2 shall be determined in accordance with the terms of the equity award agreement and the Long Term Compensation Plan pursuant to which such awards were made.

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3.3Return of Records.  Upon termination of employment, for whatever reason, or upon request by the Company at any time, Executive shall immediately return to the Company all documents, records, and materials belonging and/or relating to the Company, and all copies of all such materials.  Upon termination of employment, for whatever reason, or upon request by the Company at any time, Executive further agrees to destroy such records maintained by Executive on Executive’s own computer equipment.

3.4Release.  As a condition to the receipt of any amounts or benefits after termination of employment for whatever reason, Executive, or his/her personal representative, shall be required to execute a written release agreement in a form satisfactory to the Company containing, among other items, a general release of claims against the Company and, as an additional condition to the receipt of such amounts or benefits, Executive shall refuse to exercise any right to revoke such release agreement during any applicable rescission period.  Such written release under this Section 3.4  (A) shall be delivered to Executive within three (3) business days after the date of termination of Executive’s employment, and (B) must be executed by Executive and the rescission period must expire without revocation of such release within 40 days following the date of termination of employment or Executive shall forfeit the compensation and benefits provided under this Agreement that are conditioned upon the release. Where any payment or benefit under the Agreement constitutes a nonqualified deferred compensation arrangement within the meaning of Section 409A of the Code, to the extent that (i) Executive is not a “specified employee” as defined in Section 409A of the Code and (ii) such payments would otherwise be paid or provided to Executive within the 40-day period following the date of termination of employment, such payment(s) or benefit(s) shall commence following Executive’s execution of the written release and the expiration of the applicable rescission period, except where the 40-day period following the date of termination of employment spans two different calendar years, in which case such payment(s) or benefit(s) will not commence until the later calendar year during the 40-day period.  

ARTICLE IV

CONFIDENTIALITY

4.1Acknowledgments.  Executive acknowledges and agrees that, as an integral part of its business, the Company has expended a great deal of time, money and effort to develop and maintain confidential, proprietary and trade secret information to compete against similar businesses and that this information, if misused or disclosed, would be harmful to the Company’s business and competitive position in the marketplace.  Executive further acknowledges and agrees that in Executive’s position with the Company, the Company provides Executive with access to its confidential, proprietary and trade secret information, strategies and other confidential business information that would be of considerable value to competitive businesses.  As a result, Executive acknowledges and agrees that the restrictions contained in this Article IV are reasonable, appropriate and necessary for the protection of the Company’s confidential, proprietary and trade secret information.  For purposes of this Article IV, the term “Company” means Kohl’s Department Stores, Inc. and its parent companies, subsidiaries and other affiliates.

4.2Confidentiality During Employment.During the term of Executive’s employment

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under this Agreement, Executive will not directly or indirectly use or disclose any Confidential Information or Trade Secrets (defined below) except in the interest and for the benefit of the Company.  

4.3Trade Secrets Post-Employment.  After the termination, for whatever reason, of Executive’s employment with the Company, Executive will not directly or indirectly use or disclose any Trade Secrets.  Nothing in this Agreement shall limit or supersede any common law, statutory or other protections of trade secrets where such protections provide the Company with greater rights or protections for a longer duration than provided in this Agreement.

4.4Confidential Information Post-Employment.  For a period of two (2) years following termination, for whatever reason, of Executive’s employment with the Company, Executive will not directly or indirectly use or disclose any Confidential Information, unless such information ceases to be deemed Confidential Information by means of one of the exclusions set forth in Section 4.5(c), below.

4.5Definitions.

(a)Trade Secret.  The term “Trade Secret” shall have that meaning set forth under applicable law.

(b)Confidential Information.  The term “Confidential Information” shall mean all non-Trade Secret information of, about or related to the Company, whether created by, for or provided to the Company, which is not known to the public or the Company’s competitors, generally, including, but not limited to:  (i)   strategic growth plans, pricing policies and strategies, employment records and policies, operational methods, marketing plans and strategies, advertising plans and strategies, product development techniques and plans, business acquisition and divestiture plans, resources, vendors, sources of supply, suppliers and supplier contractual relationships and terms, technical processes, designs, inventions, research programs and results, source code, short-term and long-range planning, projections, information systems, sales objectives and performance, profit and profit margins, and seasonal plans, goals and objectives; (ii) information that is marked or otherwise designated or treated as confidential or proprietary by the Company; and (iii) information received by the Company from others which the Company has an obligation to treat as confidential.

(c)Exclusions.  Notwithstanding the foregoing, the term “Confidential Information” shall not include, and the obligations set forth in this Article IV shall not apply to, any information which: (i) can be demonstrated by Executive to have been known by Executive prior to Executive’s employment by the Company; (ii) is or becomes generally available to the public through no act or omission of Executive; (iii) is obtained by Executive in good faith from a third party who discloses such information to Executive on a non-confidential basis without violating any obligation of confidentiality or secrecy relating to the information disclosed; or (iv) is independently developed by Executive outside the scope of Executive’s employment without use of Confidential Information or Trade Secrets.

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(d)Defend Trade Secrets Act. With respect to the disclosure of a trade secret and in accordance with 18 U.S.C. § 1833, Executive shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that: (i) is made in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney, provided that, the information is disclosed solely for the purpose of reporting or investigating a suspected violation of law; or (ii) is made in a complaint or other document filed in a lawsuit or other proceeding filed under seal so that it is not disclosed to the public.  Executive is further notified that if Executive files a lawsuit for retaliation by the Company for reporting a suspected violation of law, Executive may disclose the Company’s trade secrets to Executive’s attorney and use the trade secret information in the court proceeding, provided that, Executive files any document containing the trade secret under seal so that it is not disclosed to the public and does not disclose the trade secret, except pursuant to court order.

ARTICLE V

RESTRICTED SERVICES OBLIGATION

5.1Acknowledgments.  Executive acknowledges and agrees that the Company is one of the leading retail companies in the United States, with department stores throughout the United States, and that the Company compensates executives like Executive to, among other things, develop and maintain valuable goodwill and relationships on the Company’s behalf (including relationships with customers, suppliers, vendors, employees and other associates) and to maintain business information for the Company’s exclusive ownership and use.  As a result, Executive acknowledges and agrees that the restrictions contained in this Article V are reasonable, appropriate and necessary for the protection of the Company’s goodwill, customer, supplier, vendor, employee and other associate relationships and Confidential Information and Trade Secrets.  Executive further acknowledges and agrees that the restrictions contained in this Article V will not pose an undue hardship on Executive or Executive’s ability to find gainful employment.  For purposes of this Article V, the term “Company” means Kohl’s Department Stores, Inc. and its parent companies, subsidiaries and other affiliates.

5.2Restricted Services Obligation.  In addition to the obligations Executive  owes to the Company while an employee of the Company, for the one (1) year period following termination, for whatever reason, of Executive’s employment with the Company, Executive will not, directly or indirectly, provide Restricted Services (defined below) to or on behalf of any Competitor (defined below) to or for the benefit of any market in the continental United States and any other geographic market that the Company is, or is taking material steps to do business.

5.3Definitions.

(a)Restricted Services.  “Restricted Services” shall mean services of any kind or character comparable to those Executive provided to the Company during the eighteen (18) month period immediately preceding Executive’s last date of employment with the Company.

(b)Competitor.  The term “Competitor” means Amazon.com, Inc., Belk, Inc., Bon-Ton Stores, Inc., Burlington Stores, Inc., Dillard’s, Inc., J.C. Penney Company, Inc.,

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Macy’s, Inc., Nordstrom Co., Ross Stores, Inc., Sears Holdings Corporation, Stage Stores, Inc., Target Corporation, The Gap, Inc., The TJX Companies, Inc. and Walmart Stores, Inc., including any successors, subsidiaries or affiliates of such entities.  

ARTICLE VI

BUSINESS IDEAS; NON-DISPARAGEMENT

6.1Assignment of Business Ideas.  Executive shall immediately disclose to the Company a list of all inventions, patents, applications for patent, copyrights, and applications for copyright in which Executive currently holds an interest.  The Company will own, and Executive hereby assigns to the Company, all rights in all Business Ideas.  All Business Ideas which are or form the basis for copyrightable works shall be considered “works for hire” as that term is defined by United States Copyright Law.  Any works that are not found to be “works for hire” are hereby assigned to the Company.  While employed by the Company and for one (1) year thereafter, Executive will promptly disclose all Business Ideas to the Company and execute all documents which the Company may reasonably require to perfect its patent, copyright and other rights to such Business Ideas throughout the world.  After Executive’s employment with the Company terminates, for whatever reason, Executive will cooperate with the Company to assist the Company in perfecting its rights to any Business Ideas including executing all documents which the Company may reasonably require.  For purposes of this Article VI, the term “Company” means Kohl’s Department Stores, Inc. and its parent companies, subsidiaries and other affiliates.

6.2Business Ideas.  The term “Business Ideas” as used in this Agreement means all ideas, inventions, data, software, developments and copyrightable works, whether or not patentable or registrable, which Executive originates, discovers or develops, either alone or jointly with others while Executive is employed by the Company and for one (1) year thereafter and which are (a) related to any business known by Executive to be engaged in or contemplated by the Company, (b) originated, discovered or developed during Executive’s working hours during his/her employment with the Company, or (c) originated, discovered or developed in whole or in part using materials, labor, facilities, Confidential Information, Trade Secrets, or equipment furnished by the Company.

6.3Non-Disparagement.  Executive agrees not to engage at any time in any form of conduct or make any statements or representations, or direct any other person or entity to engage in any conduct or make any statements or representations, that disparage, criticize or otherwise impair the reputation of the Company, its affiliates, parents and subsidiaries and their respective past and present officers, directors, stockholders, partners, members, agents and employees.  Nothing contained in this Section 6.3 shall preclude Executive from providing truthful testimony or statements pursuant to subpoena or other legal process or in response to inquiries from any government agency or entity.

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ARTICLE VII

NON-SOLICITATION OF RESTRICTED PERSONS

7.1Non-Solicitation of Restricted Persons.  While Executive is employed by Company, and for a period of 12 months immediately following the end, for whatever reason, of Executive’s employment with Company, Executive shall not directly or indirectly solicit any Restricted Person to provide services to or on behalf of a person or entity in a manner reasonably likely to pose a competitive threat to Company.  For purposes of this Article VII, the term “Company” means Kohl’s Department Stores, Inc. and its parent companies, subsidiaries and other affiliates.

7.2Restricted Person. The term “Restricted Person” means an individual who, at the time of the solicitation, is an employee of Company and (i) who is a top-level employee of Company, has special skills or knowledge important to Company, or has skills that are difficult for Company to replace and (ii) with whom Executive had a working relationship or about whom Executive acquired or possessed specialized knowledge, in each case, in connection with Executive’s employment with Company and during the 12 month period immediately prior to the end of Executive’s employment with Company.

ARTICLE VIII

GENERAL PROVISIONS

8.1Notices.  Any and all notices, consents, documents or communications provided for in this Agreement shall be given in writing and shall be personally delivered, mailed by registered or certified mail (return receipt requested) or sent by courier, confirmed by receipt, and addressed as follows (or to such other address as the addressed party may have substituted by notice pursuant to this Section 8.1):

(a) If to the Company:

Kohl’s Department Stores, Inc.

N56 W17000 Ridgewood Drive

Menomonee Falls, WI  53051

Attn:  Kevin Mansell, Chairman, President and CEO

(b)  If to Executive:

Any notice to be given to the Executive may be addressed to him/her at the address as it appears on the payroll records of the Company or any subsidiary thereof.

Such notice, consent, document or communication shall be deemed given upon personal delivery or receipt at the address of the party stated above or at any other address specified by such party to the other party in writing, except that if delivery is refused or cannot be made for any reason, then such notice shall be deemed given on the third day after it is sent.

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8.2Executive Disclosures and Acknowledgments.

(a)Prior Obligations.  Attached as Exhibit B is a list of prior obligations (written and oral), such as confidentiality agreements or covenants restricting future employment or consulting, that Executive has entered into which may restrict Executive’s ability to perform Executive’s duties as an employee for the Company.

(b)Confidential Information of Others.  Executive certifies that Executive has not, and will not, disclose or use during Executive’s time as an employee of the Company, any confidential information which Executive acquired as a result of any previous employment or under a contractual obligation of confidentiality or secrecy before Executive became an employee of the Company.

(c)Scope of Restrictions.  By entering into this Agreement, Executive acknowledges the nature of the Company’s business and the nature and scope of the restrictions set forth in Articles IV, V and VII, above, including specifically Wisconsin’s Uniform Trade Secrets Act, presently § 134.90,  Wis. Stats.   Executive acknowledges and represents that the scope of such restrictions are appropriate, necessary and reasonable for the protection of the Company’s business, goodwill, and property rights.  Executive further acknowledges that the restrictions imposed will not prevent Executive from earning a living in the event of, and after, termination, for whatever reason, of Executive’s employment with the Company.  Nothing herein shall be deemed to prevent Executive, after termination of Executive’s employment with the Company, from using general skills and knowledge gained while employed by the Company.

(d)Prospective Employers.  Executive agrees, during the term of any restriction contained in Articles IV, V and VII, above, to disclose such provisions to any future or prospective employer.  Executive further agrees that the Company may send a copy of this Agreement to, or otherwise make the provisions hereof known to, any such employer.  

8.3Effect of Termination.  Notwithstanding any termination of this Agreement, the Executive, in consideration of his/her employment hereunder, shall remain bound by the provisions of this Agreement which specifically relate to periods, activities or obligations upon or subsequent to the termination of the Executive’s employment.  

8.4Confidentiality of Agreement.  Executive agrees that, with the exception of disclosures pursuant to Section 8.2(d), above, Executive will not disclose, directly or indirectly, any non-public terms of this Agreement to any third party; provided, however, that following Executive’s obtaining a promise of confidentiality for the benefit of the Company from Executive’s tax preparer, accountant, attorney and spouse, Executive may disclose such terms to such of these individuals who have made such a promise of confidentiality.  This provision shall not prevent Executive from disclosing such matters in testifying in any hearing, trial or other legal proceeding where Executive is required to do so.

8.5Cooperation.  Executive agrees to take all reasonable steps during and after Executive’s employment with the Company to make himself/herself available to and to

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cooperate with the Company, at its request, in connection with any legal proceedings or other matters in which it is or may become involved.  Following Executive’s employment with the Company, the Company agrees to pay reasonable compensation to Executive and to pay all reasonable expenses incurred by Executive in connection with Executive’s obligations under this Section 8.5.

8.6Effect of Breach.  In the event that Executive breaches any provision of this Agreement or any restrictive covenant agreement between Company and Executive which is entered into subsequent to this Agreement, Executive agrees that the Company may suspend all payments to Executive under this Agreement (including any Severance Payment), recover from Executive any damages suffered as a result of such breach and recover from Executive any reasonable attorneys’ fees or costs it incurs as a result of such breach.  In addition, Executive agrees that the Company may seek injunctive or other equitable relief, without the necessity of posting bond, as a result of a breach by Executive of any provision of this Agreement.

8.7Entire Agreement.  This Agreement together with the Company’s April 24, 2018 offer of employment contains the entire understanding and the full and complete agreement of the Parties and supersedes and replaces any prior understandings and agreements among the Parties with respect to the subject matter hereof.

8.8Headings.  The headings of sections and paragraphs of this Agreement are for convenience of reference only and shall not control or affect the meaning or construction of any of its provisions.

8.9Consideration.  Execution of this Agreement is a condition of Executive’s employment with the Company and Executive’s continued employment by the Company, and the benefits provided to Executive under this Agreement as well as those described in the Company’s April 24, 2018 offer of employment, constitute the consideration for Executive’s undertakings hereunder.

8.10Amendment.  This Agreement may be altered, amended or modified only in writing, signed by both of the Parties hereto.

8.11Assignability.  This Agreement and the rights and duties set forth herein may not be assigned by Executive, but may be assigned by the Company, in whole or in part.  This Agreement shall be binding on and inure to the benefit of each party and such party’s respective heirs, legal representatives, successors and assigns.

8.12Severability.  The obligations imposed by, and the provisions of, this Agreement are severable and should be construed independently of each other.  If any court of competent jurisdiction determines that any provision of this Agreement is invalid or unenforceable, then such invalidity or unenforceability shall have no effect on the other provisions hereof, which shall remain valid, binding and enforceable and in full force and effect, and such invalid or unenforceable provision shall not affect the validity of any other provision.

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8.13Waiver of Breach.  The waiver by either party of the breach of any provision of this Agreement shall not operate or be construed as a waiver of any subsequent breach by either party.

8.14Governing Law; Construction.  This Agreement shall be governed by the internal laws of the State of Wisconsin, without regard to any rules of construction concerning the draftsman hereof.

8.15Section 409A Compliance.  The Company and Executive intend that any amounts or benefits payable or provided under this Agreement comply with the provisions of Section 409A of the Internal Revenue Code and the treasury regulations relating thereto so as not to subject Executive to the payment of the tax, interest and any tax penalty which may be imposed under Code Section 409A.  The provisions of this Agreement shall be interpreted in a manner consistent with such intent.  In furtherance thereof, to the extent that any provision hereof would otherwise result in Executive being subject to payment of tax, interest and tax penalty under Code Section 409A, the Company and Executive agree to amend this Agreement in a manner that brings this Agreement into compliance with Code Section 409A and preserves to the maximum extent possible the economic value of the relevant payment or benefit under this Agreement to Executive.

8.16Consistency With Applicable Law.  Executive acknowledges and agrees that nothing in this Agreement prohibits Executive from reporting possible violations of law to any governmental agency or entity or making other disclosures that are protected under the whistleblower provisions of federal, state or local laws or regulations.

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the day and year written above.

KOHL’S DEPARTMENT STORES, INC.:

By: /s/ Michelle Gass

Michelle Gass

Chief Merchandising and Customer Officer and

Chief Executive Officer-elect

EXECUTIVE:

By:  /s/ Doug Howe

Doug Howe

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EXHIBIT A

BASE COMPENSATION

Executive’s annual base compensation as of the date of this Agreement is Nine Hundred and Fifty Thousand and no/100 Dollars ($950,000).

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EXHIBIT B

PRIOR OBLIGATIONS

Executive’s obligations set forth in “Section 4” on the page of the agreement previously provided to Company.

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EX-31.1

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Michelle Gass, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Kohl's Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Dated:   September 7, 2018/s/ Michelle Gass

Michelle Gass

Chief Executive Officer

(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Bruce Besanko, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Kohl's Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Dated:   September 7, 2018/s/ Bruce Besanko

Bruce Besanko

Chief Financial Officer

(Principal Financial Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION OF PERIODIC REPORT

BY CHIEF EXECUTIVE OFFICER

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Michelle Gass, Chief Executive Officer of Kohl's Corporation (the “Company”), certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that, to the undersigned's knowledge, on the date of this Certification:  

1. This Quarterly Report on Form 10-Q of the Company for the quarterly period ended August 4, 2018 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. That the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated:   September 7, 2018                                         /s/ Michelle Gass          

                                                                                     Michelle Gass

                                                                                     Chief Executive Officer

                                                                                     (Principal Executive Officer)

EX-32.2

Exhibit 32.2

CERTIFICATION OF PERIODIC REPORT

BY CHIEF FINANCIAL OFFICER

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Bruce Besanko, Chief Financial Officer of Kohl's Corporation (the “Company”), certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that, to the undersigned's knowledge, on the date of this Certification:  

1. This Quarterly Report on Form 10-Q of the Company for the quarterly period ended August 4, 2018 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. That the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated:   September 7, 2018                                         /s/ Bruce Besanko                                

                                                                                     Bruce Besanko

                                                                                     Chief Financial Officer

                                                                                     (Principal Financial Officer)

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Document and Entity Information - shares	6 Months Ended
	Aug. 04, 2018	Sep. 01, 2018
Document And Entity Information [Abstract]
Entity Registrant Name	KOHLS CORP
Entity Central Index Key	0000885639
Current Fiscal Year End Date	--02-02
Entity Filer Category	Large Accelerated Filer
Trading Symbol	KSS
Document Type	10-Q
Document Period End Date	Aug. 04, 2018
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q2
Amendment Flag	false
Entity Common Stock, Shares Outstanding		166,712,843

XML

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions	Aug. 04, 2018	Feb. 03, 2018	[1]	Jul. 29, 2017	[1]
Current assets:
Cash and cash equivalents	$ 1,066	$ 1,308		$ 552
Merchandise inventories	3,572	3,542		3,853
Other	404	530		381
Total current assets	5,042	5,380		4,786
Property and equipment, net	7,635	7,773		8,068
Other assets	238	236		230
Total assets	12,915	13,389		13,084
Current liabilities:
Accounts payable	1,404	1,271		1,370
Accrued liabilities	1,174	1,213		1,125
Income taxes payable	70	99		43
Current portion of capital lease and financing obligations	122	126		133
Total current liabilities	2,770	2,709		2,671
Long-term debt	2,273	2,797		2,796
Capital lease and financing obligations	1,537	1,591		1,637
Deferred income taxes	188	211		268
Other long-term liabilities	660	662		691
Shareholders’ equity:
Common stock	4	4		4
Paid-in capital	3,163	3,078		3,026
Treasury stock, at cost	(10,835)	(10,651)		(10,596)
Accumulated other comprehensive loss	(8)	(11)		(12)
Retained earnings	13,163	12,999		12,599
Total shareholders’ equity	5,487	5,419		5,021
Total liabilities and shareholders’ equity	$ 12,915	$ 13,389		$ 13,084

[1] Refer to Note 2 for details on the adoption of the new revenue recognition accounting standard and the impact on previously reported results.

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CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Millions	3 Months Ended			6 Months Ended
	Aug. 04, 2018	Jul. 29, 2017	[1]	Aug. 04, 2018	Jul. 29, 2017	[1]
Income Statement [Abstract]
Net sales	$ 4,310	$ 4,147		$ 8,263	$ 7,962
Other revenue	260	248		515	498
Total revenue	4,570	4,395		8,778	8,460
Cost of merchandise sold	2,605	2,525		5,101	4,953
Operating expenses:
Selling, general and administrative	1,272	1,220		2,532	2,434
Depreciation and amortization	241	243		483	482
Operating income	452	407		662	591
Interest expense, net	65	75		135	150
Loss on extinguishment of debt				42
Income before income taxes	387	332		485	441
Provision for income taxes	95	124		117	167
Net income	$ 292	$ 208		$ 368	$ 274
Net income per share:
Basic	$ 1.77	$ 1.24		$ 2.23	$ 1.62
Diluted	$ 1.76	$ 1.24		$ 2.21	$ 1.62

[1] Refer to Note 2 for details on the adoption of the new revenue recognition accounting standard and the impact on previously reported results.

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CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) shares in Millions, $ in Millions		Total	Common Stock	Paid-In Capital	Treasury Stock	Accumulated Other Comprehensive Income (Loss)	Retained Earnings
Change in accounting standard | Accounting Standards Update 2014-09	[1]	$ (7)					$ (7)
Beginning Balance (Previously Reported) at Feb. 03, 2018		5,426	$ 4	$ 3,078	$ (10,651)	$ (11)	13,006
Beginning Balance (As Adjusted)		5,419	$ 4	3,078	$ (10,651)	(11)	12,999
Beginning Balance at Feb. 03, 2018	[1]	5,419
Beginning Balance (Accounting Standards Update 2014-09) at Feb. 03, 2018		5,426
Beginning Balance (in shares) (Previously Reported) at Feb. 03, 2018			373		(205)
Beginning Balance (in shares) (As Adjusted)			373		(205)
Comprehensive income		371				3	368
Stock options and awards, net of tax		64		85	$ (21)
Stock options and awards, (in shares)			1
Dividends paid ($1.22 per common share)		(202)			2		(204)
Treasury stock purchases		(165)			$ (165)
Treasury stock purchases, (in shares)					(2)
Ending Balance at Aug. 04, 2018		$ 5,487	$ 4	$ 3,163	$ (10,835)	$ (8)	$ 13,163
Ending Balance (in shares) at Aug. 04, 2018			374		(207)

[1] Refer to Note 2 for details on the adoption of the new revenue recognition accounting standard and the impact on previously reported results.

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CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (Parenthetical)	6 Months Ended
	Aug. 04, 2018 $ / shares
Statement Of Stockholders Equity [Abstract]
Dividends declared and paid per share	$ 1.22

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CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions		6 Months Ended
		Aug. 04, 2018	Jul. 29, 2017
Operating activities
Net income		$ 368	$ 274	[1]
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		483	482	[1]
Share-based compensation		50	21	[1]
Deferred income taxes		(25)	(2)	[1]
Loss on extinguishment of debt		42
Other non-cash revenues and expenses		13	(5)	[1]
Changes in operating assets and liabilities:
Merchandise inventories		(24)	(53)	[1]
Accrued and other long-term liabilities		(88)	(176)	[1]
Accounts payable		133	(137)	[1]
Other current and long-term assets		89	36	[1]
Income taxes		6	(64)	[1]
Net cash provided by operating activities		1,047	376	[1]
Investing activities
Acquisition of property and equipment		(312)	(399)	[1]
Other		6	16	[1]
Net cash used in investing activities		(306)	(383)	[1]
Financing activities
Treasury stock purchases		(165)	(250)	[1]
Shares withheld for taxes on vested restricted shares		(21)	(12)	[1]
Dividends paid		(202)	(186)	[1]
Reduction of long-term borrowings		(528)
Premium paid on redemption of debt		(35)
Capital lease and financing obligation activity		(64)	(67)	[1]
Proceeds from stock option exercises		32
Net cash used in financing activities		(983)	(515)	[1]
Net decrease in cash and cash equivalents		(242)	(522)	[1]
Cash at beginning of period	[1]	1,308	1,074
Cash at end of period		1,066	552	[1]
Supplemental information
Interest paid, net of capitalized interest		141	146	[1]
Income taxes paid		164	233	[1]
Non-cash investing and financing activities
Property and equipment acquired through additional liabilities		$ 7	$ 37	[1]

[1] Refer to Note 2 for details on the adoption of the new revenue recognition accounting standard and the impact on previously reported results.

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Basis of Presentation

6 Months Ended

Aug. 04, 2018

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Basis of Presentation

1. Basis of Presentation

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for fiscal year end consolidated financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. For further information, refer to the consolidated financial statements and related footnotes included in our Annual Report on Form 10-K for the fiscal year ended February 3, 2018 (Commission File No. 1-11084) as filed with the Securities and Exchange Commission.

Due to the seasonality of our business, results for any quarter are not necessarily indicative of the results that may be achieved for a full fiscal year.

We operate as a single business unit.

The following table provides a brief description of issued, but not yet effective, accounting standards:

Standard	Description	Effect on our Financial Statements
Leases (ASC Topic 842) Issued February 2016 Effective Q1 2019	Among other things, the new standard requires us to recognize a right-of-use asset and a lease liability on our balance sheet for each lease.  It also changes the presentation and timing of lease-related expenses.	Approximately 5% of our store leases and all of our land leases are not currently recorded on our balance sheet.  Recording right-of-use assets and lease liabilities for these and other non-store leases is expected to have a material impact on our balance sheet.  We are also evaluating the impact that recording right-of-use assets and lease liabilities will have on our income statement and the financial statement impact that the standard will have on leases which are currently recorded on our balance sheet.

In 2017, we recorded provisional amounts for certain income tax effects of the Tax Cuts & Jobs Act (the “Act"), as addressed in Staff Accounting Bulletin No. 118 (“SAB 118”).  During the six months ended August 4, 2018, we made no adjustments to the previously recorded provisional amounts related to the Act.  Additional work is needed to finalize the income tax effects of the Act and we do not expect subsequent adjustments to be material.  Any such adjustments will be recorded as income tax expense in the period in which the adjustment is finalized.

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Revenue Recognition

6 Months Ended

Aug. 04, 2018

Revenue From Contract With Customer [Abstract]

Revenue Recognition

2. Revenue Recognition

Effective February 4, 2018, we adopted Revenue from Contracts with Customers (ASC Topic 606) as required.  We adopted the new standard using the full retrospective method. The standard eliminated the transaction- and industry-specific revenue recognition guidance under prior U.S. GAAP and replaced it with a principles-based approach for revenue recognition and disclosures. Under the standard, revenue is recognized when a customer obtains controlof promised goods or services in an amount that reflects the consideration the entity expects to receive in exchange for those goods or services.

Net Sales

Net sales include revenue from the sale of merchandise and shipping revenues. Net sales are recognized when merchandise is received by the customer and we have fulfilled all performance obligations. We do not have any sales that are recorded as commissions.

The following table summarizes net sales by line of business for the periods ended August 4, 2018 and July 29, 2017:

	Three Months Ended				Six Months Ended
(Dollars in Millions)	August 4, 2018		July 29, 2017		August 4, 2018		July 29, 2017
Women's	$	1,439	$	1,398	$	2,694	$	2,633
Men's		955		890		1,745		1,625
Home		678		679		1,369		1,320
Children's		464		426		919		904
Footwear		445		415		871		815
Accessories		329		339		665		665
Net Sales	$	4,310	$	4,147	$	8,263	$	7,962

We maintain various rewards programs whereby customers earn rewards based on their spending and other promotional activities. The rewards are typically in the form of dollar off discounts which can be used on future purchases. These programs create performance obligations which require us to defer a portion of the original sale until the rewards are redeemed. Sales are recorded net of returns. At the end of each reporting period, we record a reserve based on historical return rates and patterns which reverses sales that we expect to be returned in the following period. Revenue from the sale of Kohl's gift cards is recognized when the gift card is redeemed. Liabilities for performance obligations resulting from our rewards programs, return reserves, and unredeemed gift cards and merchandise return cards totaled $358 million as of August 4, 2018, $422 million as of February 3, 2018 and $343 million as of July 29, 2017.

Net sales do not include sales tax as we are considered a pass-through conduit for collecting and remitting sales taxes.

Other Revenue

Other revenue consists primarily of revenue from our credit card operations, unused gift and merchandise return cards (breakage), and other non-merchandise revenues.

Revenue from credit card operations includes our share of the finance charges and interest fees, less charge-offs of the Kohl’s credit card pursuant to the Private Label Credit Card Program Agreement. Expenses related to our credit card operations are reported in SG&A.

Income from unused gift cards and merchandise return cards (breakage) is recorded in proportion and over the time period the cards are actually redeemed.

The following tables summarize the impact of adoption of the new standard by financial statement line item:

Three Months Ended July 29, 2017 (Dollars in Millions, Except per Share Data)	As Previously Reported		New Standard Adjustment		Adjusted
Net sales	$	4,144	$	3	$	4,147
Other revenue				248		248
Total revenue				251		4,395
Cost of merchandise sold		2,511		14		2,525
Gross margin		1,633
Operating expenses:
Selling, general and administrative		983		237		1,220
Depreciation and amortization		243		-		243
Operating income		407		-		407
Interest expense, net		75		-		75
Income before income taxes		332		-		332
Provision for income taxes		124		-		124
Net income	$	208	$	-	$	208
Net income per share:
Basic	$	1.24	$	-	$	1.24
Diluted	$	1.24	$	-	$	1.24

Six Months Ended July 29, 2017 (Dollars in Millions, Except per Share Data)	As Previously Reported		New Standard Adjustment			Adjusted
Net sales	$	7,987	$	(25	)	$	7,962
Other revenue				498			498
Total revenue				473			8,460
Cost of merchandise sold		4,956		(3	)		4,953
Gross margin		3,031
Operating expenses:
Selling, general and administrative		1,958		476			2,434
Depreciation and amortization		482		-			482
Operating income		591		-			591
Interest expense, net		150		-			150
Income before income taxes		441		-			441
Provision for income taxes		167		-			167
Net income	$	274	$	-		$	274
Net income per share:
Basic	$	1.62	$	-		$	1.62
Diluted	$	1.62	$	-		$	1.62

July 29, 2017 (Dollars in Millions)	As Previously Reported		New Standard Adjustment			Adjusted
Assets
Current assets:
Cash and cash equivalents	$	552	$	-		$	552
Merchandise inventories		3,853		-			3,853
Other		335		46			381
Total current assets		4,740		46			4,786
Property and equipment, net		8,068		-			8,068
Other assets		230		-			230
Total assets	$	13,038	$	46		$	13,084
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable	$	1,370	$	-		$	1,370
Accrued liabilities		1,069		56			1,125
Income taxes payable		43		-			43
Current portion of capital lease and financing obligations		133		-			133
Total current liabilities		2,615		56			2,671
Long-term debt		2,796		-			2,796
Capital lease and financing obligations		1,637		-			1,637
Deferred income taxes		271		(3	)		268
Other long-term liabilities		691		-			691
Total shareholders’ equity		5,028		(7	)		5,021
Total liabilities and shareholders’ equity	$	13,038	$	46		$	13,084

February 3, 2018 (Dollars in Millions)	As Previously Reported		New Standard Adjustment			Adjusted
Assets
Current assets:
Cash and cash equivalents	$	1,308	$	-		$	1,308
Merchandise inventories		3,542		-			3,542
Other		481		49			530
Total current assets		5,331		49			5,380
Property and equipment, net		7,773		-			7,773
Other assets		236		-			236
Total assets	$	13,340	$	49		$	13,389
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable	$	1,271	$	-		$	1,271
Accrued liabilities		1,155		58			1,213
Income taxes payable		99		-			99
Current portion of capital lease and financing obligations		126		-			126
Total current liabilities		2,651		58			2,709
Long-term debt		2,797		-			2,797
Capital lease and financing obligations		1,591		-			1,591
Deferred income taxes		213		(2	)		211
Other long-term liabilities		662		-			662
Total shareholders’ equity		5,426		(7	)		5,419
Total liabilities and shareholders’ equity	$	13,340	$	49		$	13,389

The adoption of the new standard had no impact on our basic or diluted earnings per share or our net cash provided by (used in) operating, financing, or investing activities.

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Store Closure and Restructure Reserve

6 Months Ended

Aug. 04, 2018

Restructuring And Related Activities [Abstract]

Store Closure and Restructure Reserve

3. Store Closure and Restructure Reserve

The following table summarizes changes in the store closure and restructure reserve during the six months ended August 4, 2018:

(Dollars in Millions)
Balance - February 3, 2018	$	87
Payments and reversals		(10	)
Balance - August 4, 2018	$	77

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Debt

6 Months Ended

Aug. 04, 2018

Debt Disclosure [Abstract]

Debt

4. Debt

Long-term debt consists of the following unsecured senior debt:

							Outstanding
Maturity (Dollars in Millions)	Effective Rate			Coupon Rate			August 4, 2018		February 3, 2018 & July 29, 2017
2021		4.81	%		4.00	%	$	413	$	650
2023		3.25	%		3.25	%		350		350
2023		4.78	%		4.75	%		184		300
2025		4.25	%		4.25	%		650		650
2029		7.36	%		7.25	%		42		99
2033		6.05	%		6.00	%		112		166
2037		6.89	%		6.88	%		101		150
2045		5.57	%		5.55	%		435		450
		4.76	%				$	2,287	$	2,815

Long-term debt is net of unamortized debt discounts and deferred financing costs of $14 million at August 4, 2018, $18 million at February 3, 2018, and $19 million at July 29, 2017.

Our long-term debt is classified as Level 1, financial instruments with unadjusted, quoted prices listed on active market exchanges. The estimated fair value of our long-term debt was $2.3 billion at August 4, 2018 and $2.9 billion at both February 3, 2018 and July 29, 2017.

Year to date, we have reduced our outstanding debt by $528 million, including $500 million which was repurchased pursuant to a cash tender offer in the first quarter and $28 million which was repurchased on the open market during the second quarter.  In conjunction with the debt reduction, we recorded a $42 million loss on extinguishment of debt which includes $35 million of premium paid to holders of the debt, $4 million related to an interest rate hedge, and $3 million of deferred financing fees and original issue discounts.

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Stock-Based Compensation

6 Months Ended

Aug. 04, 2018

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Stock-Based Compensation

5. Stock-Based Compensation

The following table summarizes our stock-based compensation activity for the six months ended August 4, 2018:

	Stock Options					Nonvested Stock Awards					Performance Share Units
(Shares and Units in Thousands)	Shares			Weighted Average Exercise Price		Shares			Weighted Average Grant Date Fair Value		Units			Weighted Average Grant Date Fair Value
Balance - February 3, 2018		1,139		$	50.51		2,811		$	45.60		660		$	44.97
Granted		—			—		975			63.63		179			66.30
Exercised/vested		(959	)		50.49		(859	)		48.13		(38	)		78.35
Forfeited/expired		(2	)		53.38		(62	)		48.60		(5	)		46.91
Balance - August 4, 2018		178		$	51.36		2,865		$	50.94		796		$	48.17

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Contingencies

6 Months Ended

Aug. 04, 2018

Commitments And Contingencies Disclosure [Abstract]

Contingencies

6. Contingencies

We are subject to certain legal proceedings and claims arising out of the conduct of our business.  In the opinion of management, the outcome of these proceedings and litigation will not have a material adverse impact on our consolidated financial statements.

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Net Income Per Share

6 Months Ended

Aug. 04, 2018

Net Income Per Section [Abstract]

Net Income Per Share

7. Net Income Per Share

Basic net income per share is net income divided by the average number of common shares outstanding during the period. Diluted net income per share includes incremental shares assumed for share-based awards.

The information required to compute basic and diluted net income per share is as follows:

	Three Months Ended
(Dollar and Shares in Millions, Except per Share Data)	August 4, 2018		July 29, 2017
Numerator—Net income	$	292	$	208
Denominator—Weighted average shares:
Basic		165		168
Impact of dilutive stock-based awards		1		—
Diluted		166		168
Antidilutive shares		—		3
Net income per share:
Basic	$	1.77	$	1.24
Diluted	$	1.76	$	1.24

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Basis of Presentation (Tables)

6 Months Ended

Aug. 04, 2018

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Description of Issued, But Not Yet Effective, Accounting Standards

The following table provides a brief description of issued, but not yet effective, accounting standards:

Standard	Description	Effect on our Financial Statements
Leases (ASC Topic 842) Issued February 2016 Effective Q1 2019	Among other things, the new standard requires us to recognize a right-of-use asset and a lease liability on our balance sheet for each lease.  It also changes the presentation and timing of lease-related expenses.	Approximately 5% of our store leases and all of our land leases are not currently recorded on our balance sheet.  Recording right-of-use assets and lease liabilities for these and other non-store leases is expected to have a material impact on our balance sheet.  We are also evaluating the impact that recording right-of-use assets and lease liabilities will have on our income statement and the financial statement impact that the standard will have on leases which are currently recorded on our balance sheet.

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Revenue Recognition (Tables) - Accounting Standards Update 2014-09 [Member]

6 Months Ended

Aug. 04, 2018

Schedule of Net Sales by Line of Business

The following table summarizes net sales by line of business for the periods ended August 4, 2018 and July 29, 2017:

	Three Months Ended				Six Months Ended
(Dollars in Millions)	August 4, 2018		July 29, 2017		August 4, 2018		July 29, 2017
Women's	$	1,439	$	1,398	$	2,694	$	2,633
Men's		955		890		1,745		1,625
Home		678		679		1,369		1,320
Children's		464		426		919		904
Footwear		445		415		871		815
Accessories		329		339		665		665
Net Sales	$	4,310	$	4,147	$	8,263	$	7,962

Schedule of Impact of Adoption of the New Standard by Income Statement Line Item

The following tables summarize the impact of adoption of the new standard by financial statement line item:

Three Months Ended July 29, 2017 (Dollars in Millions, Except per Share Data)	As Previously Reported		New Standard Adjustment		Adjusted
Net sales	$	4,144	$	3	$	4,147
Other revenue				248		248
Total revenue				251		4,395
Cost of merchandise sold		2,511		14		2,525
Gross margin		1,633
Operating expenses:
Selling, general and administrative		983		237		1,220
Depreciation and amortization		243		-		243
Operating income		407		-		407
Interest expense, net		75		-		75
Income before income taxes		332		-		332
Provision for income taxes		124		-		124
Net income	$	208	$	-	$	208
Net income per share:
Basic	$	1.24	$	-	$	1.24
Diluted	$	1.24	$	-	$	1.24

Six Months Ended July 29, 2017 (Dollars in Millions, Except per Share Data)	As Previously Reported		New Standard Adjustment			Adjusted
Net sales	$	7,987	$	(25	)	$	7,962
Other revenue				498			498
Total revenue				473			8,460
Cost of merchandise sold		4,956		(3	)		4,953
Gross margin		3,031
Operating expenses:
Selling, general and administrative		1,958		476			2,434
Depreciation and amortization		482		-			482
Operating income		591		-			591
Interest expense, net		150		-			150
Income before income taxes		441		-			441
Provision for income taxes		167		-			167
Net income	$	274	$	-		$	274
Net income per share:
Basic	$	1.62	$	-		$	1.62
Diluted	$	1.62	$	-		$	1.62

Schedule of Impact of Adoption of the New Standard by Balance Sheet Line Item

July 29, 2017 (Dollars in Millions)	As Previously Reported		New Standard Adjustment			Adjusted
Assets
Current assets:
Cash and cash equivalents	$	552	$	-		$	552
Merchandise inventories		3,853		-			3,853
Other		335		46			381
Total current assets		4,740		46			4,786
Property and equipment, net		8,068		-			8,068
Other assets		230		-			230
Total assets	$	13,038	$	46		$	13,084
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable	$	1,370	$	-		$	1,370
Accrued liabilities		1,069		56			1,125
Income taxes payable		43		-			43
Current portion of capital lease and financing obligations		133		-			133
Total current liabilities		2,615		56			2,671
Long-term debt		2,796		-			2,796
Capital lease and financing obligations		1,637		-			1,637
Deferred income taxes		271		(3	)		268
Other long-term liabilities		691		-			691
Total shareholders’ equity		5,028		(7	)		5,021
Total liabilities and shareholders’ equity	$	13,038	$	46		$	13,084

February 3, 2018 (Dollars in Millions)	As Previously Reported		New Standard Adjustment			Adjusted
Assets
Current assets:
Cash and cash equivalents	$	1,308	$	-		$	1,308
Merchandise inventories		3,542		-			3,542
Other		481		49			530
Total current assets		5,331		49			5,380
Property and equipment, net		7,773		-			7,773
Other assets		236		-			236
Total assets	$	13,340	$	49		$	13,389
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable	$	1,271	$	-		$	1,271
Accrued liabilities		1,155		58			1,213
Income taxes payable		99		-			99
Current portion of capital lease and financing obligations		126		-			126
Total current liabilities		2,651		58			2,709
Long-term debt		2,797		-			2,797
Capital lease and financing obligations		1,591		-			1,591
Deferred income taxes		213		(2	)		211
Other long-term liabilities		662		-			662
Total shareholders’ equity		5,426		(7	)		5,419
Total liabilities and shareholders’ equity	$	13,340	$	49		$	13,389

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Store Closure and Restructure Reserve (Tables)

6 Months Ended

Aug. 04, 2018

Restructuring And Related Activities [Abstract]

Schedule of Restructuring Reserve by Type of Cost

The following table summarizes changes in the store closure and restructure reserve during the six months ended August 4, 2018:

(Dollars in Millions)
Balance - February 3, 2018	$	87
Payments and reversals		(10	)
Balance - August 4, 2018	$	77

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Debt (Tables)

6 Months Ended

Aug. 04, 2018

Debt Disclosure [Abstract]

Components of long-term debt

Long-term debt consists of the following unsecured senior debt:

							Outstanding
Maturity (Dollars in Millions)	Effective Rate			Coupon Rate			August 4, 2018		February 3, 2018 & July 29, 2017
2021		4.81	%		4.00	%	$	413	$	650
2023		3.25	%		3.25	%		350		350
2023		4.78	%		4.75	%		184		300
2025		4.25	%		4.25	%		650		650
2029		7.36	%		7.25	%		42		99
2033		6.05	%		6.00	%		112		166
2037		6.89	%		6.88	%		101		150
2045		5.57	%		5.55	%		435		450
		4.76	%				$	2,287	$	2,815

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Stock-Based Compensation (Tables)

6 Months Ended

Aug. 04, 2018

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Disclosure of Share-based Compensation Arrangements by Share-based Payment Award

The following table summarizes our stock-based compensation activity for the six months ended August 4, 2018:

	Stock Options					Nonvested Stock Awards					Performance Share Units
(Shares and Units in Thousands)	Shares			Weighted Average Exercise Price		Shares			Weighted Average Grant Date Fair Value		Units			Weighted Average Grant Date Fair Value
Balance - February 3, 2018		1,139		$	50.51		2,811		$	45.60		660		$	44.97
Granted		—			—		975			63.63		179			66.30
Exercised/vested		(959	)		50.49		(859	)		48.13		(38	)		78.35
Forfeited/expired		(2	)		53.38		(62	)		48.60		(5	)		46.91
Balance - August 4, 2018		178		$	51.36		2,865		$	50.94		796		$	48.17

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Net Income Per Share (Tables)

6 Months Ended

Aug. 04, 2018

Net Income Per Section [Abstract]

Basic and Diluted Net Income Per Share Calculation

The information required to compute basic and diluted net income per share is as follows:

	Three Months Ended
(Dollar and Shares in Millions, Except per Share Data)	August 4, 2018		July 29, 2017
Numerator—Net income	$	292	$	208
Denominator—Weighted average shares:
Basic		165		168
Impact of dilutive stock-based awards		1		—
Diluted		166		168
Antidilutive shares		—		3
Net income per share:
Basic	$	1.77	$	1.24
Diluted	$	1.76	$	1.24

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Basis of Presentation - Description of Issued, But Not Yet Effective, Accounting Standards (Details)	6 Months Ended
	Aug. 04, 2018
Accounting Standards Update 2016-02 - Leases [Member]
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Percentage of store leases unrecorded on Balance Sheet	5.00%

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Revenue Recognition - Additional Information (Detail) - USD ($) $ in Millions	6 Months Ended
	Aug. 04, 2018	Feb. 03, 2018	Jul. 29, 2017
Revenue From Contract With Customer [Abstract]
Description of adoption of new accounting pronouncement	Effective February 4, 2018, we adopted Revenue from Contracts with Customers (ASC Topic 606) as required. We adopted the new standard using the full retrospective method. The standard eliminated the transaction- and industry-specific revenue recognition guidance under prior U.S. GAAP and replaced it with a principles-based approach for revenue recognition and disclosures. Under the standard, revenue is recognized when a customer obtains control of promised goods or services in an amount that reflects the consideration the entity expects to receive in exchange for those goods or services.
Sales recorded as commission	$ 0
Liabilities for performance obligations	$ 358	$ 422	$ 343

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Revenue Recognition - Schedule of Net Sales by Line of Business (Detail) - USD ($) $ in Millions	3 Months Ended			6 Months Ended
	Aug. 04, 2018	Jul. 29, 2017		Aug. 04, 2018	Jul. 29, 2017
Disaggregation Of Revenue [Line Items]
Net sales	$ 4,310	$ 4,147	[1]	$ 8,263	$ 7,962	[1]
Women's [Member]
Disaggregation Of Revenue [Line Items]
Net sales	1,439	1,398		2,694	2,633
Men's [Member]
Disaggregation Of Revenue [Line Items]
Net sales	955	890		1,745	1,625
Home [Member]
Disaggregation Of Revenue [Line Items]
Net sales	678	679		1,369	1,320
Children's [Member]
Disaggregation Of Revenue [Line Items]
Net sales	464	426		919	904
Footwear [Member]
Disaggregation Of Revenue [Line Items]
Net sales	445	415		871	815
Accessories [Member]
Disaggregation Of Revenue [Line Items]
Net sales	$ 329	$ 339		$ 665	$ 665

[1] Refer to Note 2 for details on the adoption of the new revenue recognition accounting standard and the impact on previously reported results.

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Revenue Recognition - Schedule of Impact of Adoption of the New Standard by Income Statement Line Item (Detail) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended			6 Months Ended
	Aug. 04, 2018	Jul. 29, 2017		Aug. 04, 2018	Jul. 29, 2017
Revenue Initial Application Period Cumulative Effect Transition [Line Items]
Net sales	$ 4,310	$ 4,147	[1]	$ 8,263	$ 7,962	[1]
Other revenue	260	248	[1]	515	498	[1]
Total revenue	4,570	4,395	[1]	8,778	8,460	[1]
Cost of merchandise sold	2,605	2,525	[1]	5,101	4,953	[1]
Operating expenses:
Selling, general and administrative	1,272	1,220	[1]	2,532	2,434	[1]
Depreciation and amortization	241	243	[1]	483	482	[1]
Operating income	452	407	[1]	662	591	[1]
Interest expense, net	65	75	[1]	135	150	[1]
Income before income taxes	387	332	[1]	485	441	[1]
Provision for income taxes	95	124	[1]	117	167	[1]
Net income	$ 292	$ 208	[1]	$ 368	$ 274	[1]
Net income per share:
Basic	$ 1.77	$ 1.24	[1]	$ 2.23	$ 1.62	[1]
Diluted	$ 1.76	$ 1.24	[1]	$ 2.21	$ 1.62	[1]
Accounting Standards Update 2014-09 [Member]
Revenue Initial Application Period Cumulative Effect Transition [Line Items]
Net sales		$ 4,144			$ 7,987
Cost of merchandise sold		2,511			4,956
Gross margin		1,633			3,031
Operating expenses:
Selling, general and administrative		983			1,958
Depreciation and amortization		243			482
Operating income		407			591
Interest expense, net		75			150
Income before income taxes		332			441
Provision for income taxes		124			167
Net income		$ 208			$ 274
Net income per share:
Basic		$ 1.24			$ 1.62
Diluted		$ 1.24			$ 1.62
Accounting Standards Update 2014-09 [Member] | New Standard Adjustment [Member]
Revenue Initial Application Period Cumulative Effect Transition [Line Items]
Net sales		$ 3			$ (25)
Other revenue		248			498
Total revenue		251			473
Cost of merchandise sold		14			(3)
Operating expenses:
Selling, general and administrative		237			476
Accounting Standards Update 2014-09 [Member] | Adjusted [Member]
Revenue Initial Application Period Cumulative Effect Transition [Line Items]
Net sales		4,147			7,962
Other revenue		248			498
Total revenue		4,395			8,460
Cost of merchandise sold		2,525			4,953
Operating expenses:
Selling, general and administrative		1,220			2,434
Depreciation and amortization		243			482
Operating income		407			591
Interest expense, net		75			150
Income before income taxes		332			441
Provision for income taxes		124			167
Net income		$ 208			$ 274
Net income per share:
Basic		$ 1.24			$ 1.62
Diluted		$ 1.24			$ 1.62

[1] Refer to Note 2 for details on the adoption of the new revenue recognition accounting standard and the impact on previously reported results.

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Revenue Recognition - Schedule of Impact of Adoption of the New Standard by Balance Sheet Line Item (Detail) - USD ($) $ in Millions	Aug. 04, 2018	Feb. 03, 2018		Jul. 29, 2017		Jan. 28, 2017	[1]
Assets
Cash and cash equivalents	$ 1,066	$ 1,308	[1]	$ 552	[1]	$ 1,074
Merchandise inventories	3,572	3,542	[1]	3,853	[1]
Other	404	530	[1]	381	[1]
Total current assets	5,042	5,380	[1]	4,786	[1]
Property and equipment, net	7,635	7,773	[1]	8,068	[1]
Other assets	238	236	[1]	230	[1]
Total assets	12,915	13,389	[1]	13,084	[1]
Liabilities and Shareholders’ Equity
Accounts payable	1,404	1,271	[1]	1,370	[1]
Accrued liabilities	1,174	1,213	[1]	1,125	[1]
Income taxes payable	70	99	[1]	43	[1]
Current portion of capital lease and financing obligations	122	126	[1]	133	[1]
Total current liabilities	2,770	2,709	[1]	2,671	[1]
Long-term debt	2,273	2,797	[1]	2,796	[1]
Capital lease and financing obligations	1,537	1,591	[1]	1,637	[1]
Deferred income taxes	188	211	[1]	268	[1]
Other long-term liabilities	660	662	[1]	691	[1]
Total shareholders’ equity	5,487	5,419	[1]	5,021	[1]
Total liabilities and shareholders’ equity	$ 12,915	13,389	[1]	13,084	[1]
Accounting Standards Update 2014-09 [Member]
Assets
Cash and cash equivalents		1,308		552
Merchandise inventories		3,542		3,853
Other		481		335
Total current assets		5,331		4,740
Property and equipment, net		7,773		8,068
Other assets		236		230
Total assets		13,340		13,038
Liabilities and Shareholders’ Equity
Accounts payable		1,271		1,370
Accrued liabilities		1,155		1,069
Income taxes payable		99		43
Current portion of capital lease and financing obligations		126		133
Total current liabilities		2,651		2,615
Long-term debt		2,797		2,796
Capital lease and financing obligations		1,591		1,637
Deferred income taxes		213		271
Other long-term liabilities		662		691
Total shareholders’ equity		5,426		5,028
Total liabilities and shareholders’ equity		13,340		13,038
Accounting Standards Update 2014-09 [Member] | New Standard Adjustment [Member]
Assets
Other		49		46
Total current assets		49		46
Total assets		49		46
Liabilities and Shareholders’ Equity
Accrued liabilities		58		56
Total current liabilities		58		56
Deferred income taxes		(2)		(3)
Total shareholders’ equity		(7)		(7)
Total liabilities and shareholders’ equity		49		46
Accounting Standards Update 2014-09 [Member] | Adjusted [Member]
Assets
Cash and cash equivalents		1,308		552
Merchandise inventories		3,542		3,853
Other		530		381
Total current assets		5,380		4,786
Property and equipment, net		7,773		8,068
Other assets		236		230
Total assets		13,389		13,084
Liabilities and Shareholders’ Equity
Accounts payable		1,271		1,370
Accrued liabilities		1,213		1,125
Income taxes payable		99		43
Current portion of capital lease and financing obligations		126		133
Total current liabilities		2,709		2,671
Long-term debt		2,797		2,796
Capital lease and financing obligations		1,591		1,637
Deferred income taxes		211		268
Other long-term liabilities		662		691
Total shareholders’ equity		5,419		5,021
Total liabilities and shareholders’ equity		$ 13,389		$ 13,084

[1] Refer to Note 2 for details on the adoption of the new revenue recognition accounting standard and the impact on previously reported results.

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Store Closure and Restructure Reserve - Schedule of Restructuring Reserve by Type of Cost (Details) $ in Millions	6 Months Ended
	Aug. 04, 2018 USD ($)
Restructuring And Related Activities [Abstract]
Restructuring Reserve	$ 87
Payments and reversals	(10)
Restructuring Reserve	$ 77

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Debt - Components of Long Term Debt (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Aug. 04, 2018	May 05, 2018	Aug. 04, 2018	Feb. 03, 2018	Jul. 29, 2017
Debt Instrument [Line Items]
Unamortized debt discount	$ 14		$ 14	$ 18	$ 19
Long-term Debt, Fair Value	$ 2,300		2,300	2,900	2,900
Loss on extinguishment of debt			42
Premiums paid to holders as a result of tender offer			$ 35
Senior Notes
Debt Instrument [Line Items]
Effective Rate	4.76%		4.76%
Total senior debt	$ 2,287		$ 2,287	2,815	2,815
Cash tender offer amount	$ 28	$ 500	528
Loss on extinguishment of debt			42
Premiums paid to holders as a result of tender offer			35
Non cash write off of interest rate hedge on tendered debt			4
Non cash write off of deferred financing costs and original issue discounts on extinguished debt			$ 3
Senior Notes | Senior Notes Due 2021 [Member]
Debt Instrument [Line Items]
Effective Rate	4.81%		4.81%
Debt Instrument, Interest Rate, Stated Percentage	4.00%		4.00%
Total senior debt	$ 413		$ 413	650	650
Senior Notes | Senior Notes Due 2023 [Member]
Debt Instrument [Line Items]
Effective Rate	3.25%		3.25%
Debt Instrument, Interest Rate, Stated Percentage	3.25%		3.25%
Total senior debt	$ 350		$ 350	350	350
Senior Notes | Senior Notes 4.78% Due 2023 [Member]
Debt Instrument [Line Items]
Effective Rate	4.78%		4.78%
Debt Instrument, Interest Rate, Stated Percentage	4.75%		4.75%
Total senior debt	$ 184		$ 184	300	300
Senior Notes | Senior Notes Due 2025 [Member]
Debt Instrument [Line Items]
Effective Rate	4.25%		4.25%
Debt Instrument, Interest Rate, Stated Percentage	4.25%		4.25%
Total senior debt	$ 650		$ 650	650	650
Senior Notes | Senior Notes Due 2029 [Member]
Debt Instrument [Line Items]
Effective Rate	7.36%		7.36%
Debt Instrument, Interest Rate, Stated Percentage	7.25%		7.25%
Total senior debt	$ 42		$ 42	99	99
Senior Notes | Senior Notes Due 2033 [Member]
Debt Instrument [Line Items]
Effective Rate	6.05%		6.05%
Debt Instrument, Interest Rate, Stated Percentage	6.00%		6.00%
Total senior debt	$ 112		$ 112	166	166
Senior Notes | Senior Notes Due 2037 [Member]
Debt Instrument [Line Items]
Effective Rate	6.89%		6.89%
Debt Instrument, Interest Rate, Stated Percentage	6.88%		6.88%
Total senior debt	$ 101		$ 101	150	150
Senior Notes | Senior Notes Due 2045 [Member]
Debt Instrument [Line Items]
Effective Rate	5.57%		5.57%
Debt Instrument, Interest Rate, Stated Percentage	5.55%		5.55%
Total senior debt	$ 435		$ 435	$ 450	$ 450

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Stock-Based Compensation - Summary of Stock Based Compensation Grants (Details) shares in Thousands	6 Months Ended
	Aug. 04, 2018 $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
Balance at beginning of year, Weighted Average Exercise Price (in dollars per share) | $ / shares	$ 50.51
Granted, Weighted Average Exercise Price (in dollars per share) | $ / shares	0
Exercised/vested, Weighted Average Exercise Price (in dollars per share) | $ / shares	50.49
Forfeited/expired, Weighted Average Exercise Price (in dollars per share) | $ / shares	53.38
Balance at end of quarter, Weighted Average Exercise Price (in dollars per share) | $ / shares	$ 51.36
Balance at beginning of year, shares | shares	1,139
Granted, shares | shares	0
Exercised/vested, shares | shares	(959)
Forfeited/expired, shares | shares	(2)
Balance at end of quarter, shares | shares	178
Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Intrinsic Value [Roll Forward]
Balance at beginning of year, Weighted Average Grant Date Fair Value | $ / shares	$ 45.60
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value | $ / shares	63.63
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Weighted Average Grant Date Fair Value | $ / shares	48.13
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeitures, Weighted Average Grant Date Fair Value | $ / shares	48.60
Balance at end of quarter, Weighted Average Grant Date Fair Value | $ / shares	$ 50.94
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number | shares	2,811
Granted, shares | shares	975
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period | shares	(859)
Forfeited/expired performance restricted share units | shares	(62)
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number | shares	2,865
Performance Shares [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Intrinsic Value [Roll Forward]
Balance at beginning of year, Weighted Average Grant Date Fair Value | $ / shares	$ 44.97
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value | $ / shares	66.30
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Weighted Average Grant Date Fair Value | $ / shares	78.35
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeitures, Weighted Average Grant Date Fair Value | $ / shares	46.91
Balance at end of quarter, Weighted Average Grant Date Fair Value | $ / shares	$ 48.17
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number | shares	660
Granted, shares | shares	179
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period | shares	(38)
Forfeited/expired performance restricted share units | shares	(5)
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number | shares	796

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Net Income Per Share - Basic and Diluted Net Income Per Share Calculation (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions	3 Months Ended			6 Months Ended
	Aug. 04, 2018	Jul. 29, 2017		Aug. 04, 2018	Jul. 29, 2017	[1]
Net Income Per Section [Abstract]
Numerator—Net income	$ 292	$ 208	[1]	$ 368	$ 274
Denominator—Weighted average shares: Basic	165	168
Denominator—Weighted average shares: Impact of dilutive stock-based awards	1
Denominator—Weighted average shares: Diluted	166	168
Antidilutive shares		3
Net income per share: Basic	$ 1.77	$ 1.24	[1]	$ 2.23	$ 1.62
Net income per share: Diluted	$ 1.76	$ 1.24	[1]	$ 2.21	$ 1.62

[1] Refer to Note 2 for details on the adoption of the new revenue recognition accounting standard and the impact on previously reported results.