KSS - continuing to see same store sales decline
Translated- shoppers going elsewhere
3rd qtr guidance over-optimistically based on that suddenly changing, which just isn't happening, considering jittery consumer.
Kohl's Corporation Reports Second Quarter Net Income Increase of 39% and Earnings Per Share of $0.45
Thursday August 12, 4:30 pm ET
MENOMONEE FALLS, Wis.--(BUSINESS WIRE)--Aug. 12, 2004--Kohl's Corporation (NYSE:KSS - News) today reported net sales and earnings for the second quarter ended July 31, 2004.
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Kohl's Corporation reported a 39 percent increase in net income for the quarter ended July 31, 2004. Net income was $155.8 million, or $0.45 per diluted share compared with $112.1 million or $0.33 per diluted share a year ago. Net sales increased 13.1 percent to $2.5 billion for the quarter. Comparable store sales decreased 1.1 percent for the same period.
For the six months ended July 31, 2004, net income increased 21 percent to $269.6 million or $0.78 per diluted share, compared with $223.2 million or $0.65 per diluted share for the six months ended August 2, 2003. Net sales increased 12.8 percent to $4.9 billion from $4.3 billion a year ago. Comparable store sales decreased 0.5 percent for the same period.
Larry Montgomery, Kohl's chairman and chief executive officer, said, "We have made significant progress on our 2004 initiatives as evidenced by our strong earnings performance for the quarter. We are very comfortable with the level and content of our inventory and the controls we have in place to maintain the appropriate level. At the same time, our in-store efforts to create a better shopping environment have been well received by the customer."
Montgomery added, "We have seen continued improvement in the selling of new receipts throughout the second quarter. This fact, along with our planned new merchandise launches throughout the third quarter, gives us confidence that we will return to positive comparable store sales increases in the third quarter."
Expansion Update
During the first half of the year, the Company successfully opened 47 new stores including entries into the Sacramento, CA; San Diego, CA; Fresno, CA; and Memphis, TN markets.
The Company now operates 589 stores in 38 states, compared with 492 stores in 34 states at the same time last year.
The Company plans to open another 48 stores in the third quarter of fiscal 2004, seven in August and 41 in October. The Company plans to enter the San Francisco, CA market with 11 stores; the Salt Lake City, UT market with five stores; the Rochester, NY market with three stores; the Portland, ME market with two stores; the Reno, NV market with two stores and the Montgomery, AL market with one store. In addition, the Company will add nine stores in the Midwest region, six stores in the Northeast region, five stores in the Southwest region, three stores in the South Central region and one store in the Southeast region. In total, the Company plans to open 95 stores in fiscal 2004.
In fiscal 2005, the Company plans to open another 95 stores with approximately half of the stores opening during the first quarter.
Second Quarter Earnings Conference Call
Investors will have the opportunity to listen to the second quarter earnings conference call today at 5:00 PM (EDT) by dialing 847-619-6368 ten minutes prior to the start of the call, over the Internet through the Company's web site located at kohls.com (see "Company News"), or through Broadcast Networks' Vcall web site located at vcall.com. To listen to the call, please go to either web site at least 15 minutes early to register, download and install any necessary audio software. For those who cannot listen to the live broadcast, a replay will be available shortly after the call. To access a 24-hour telephone replay of the call, simply dial 630-652-3018. (Pass Code: 9424524).
Cautionary Statement Regarding Forward-Looking Information
This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Kohl's intends forward-looking terminology such as "believes", "expects", "may", "will", "should", "anticipates", "plans", or similar expressions to identify forward-looking statements. Such statements are subject to certain risks and uncertainties, which could cause Kohl's actual results to differ materially from those anticipated by the forward-looking statements. These risks and uncertainties include, but are not limited to those described on Exhibit 99.1 to Kohl's annual report on Form 10-K, which is expressly incorporated herein by reference, and other factors as may periodically be described in Kohl's filings with the SEC.
KOHL'S CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In Millions, except per share data)
(Unaudited)
3 Months Ended
----------------------------------------------
% to % to
July 31, Net August 2, Net
2004 Sales 2003 Sales
----------------------------------------------
Net sales $2,497.9 $2,208.5
Cost of merchandise sold 1,587.9 63.6% 1,471.7 66.6%
------------ ---------------
Gross margin 910.0 36.4% 736.8 33.4%
Operating expenses
Selling, general and
administrative 569.1 22.8% 473.8 21.5%
Depreciation and
amortization 70.8 2.8% 57.0 2.6%
Preopening expenses 4.7 0.2% 2.5 0.1%
------------ ---------------
Operating income 265.4 10.6% 203.5 9.2%
Interest expense, net 15.0 0.6% 23.2 1.0%
------------ ---------------
Income before income
taxes 250.4 10.0% 180.3 8.2%
Provision for income
taxes 94.6 3.8% 68.2 3.1%
------------ ---------------
Net income $155.8 6.2% $112.1 5.1%
============ ===============
Basic net income per
share $0.46 $0.33
Avg. number of shares 341.0 339.0
Diluted net income per
share $0.45 $0.33
Avg. number of shares 344.2 343.7
6 Months Ended
----------------------------------------------
% to % to
July 31, Net August 2, Net
2004 Sales 2003 Sales
----------------------------------------------
Net sales $4,878.0 $4,326.2
Cost of merchandise sold 3,120.5 64.0% 2,848.1 65.8%
------------ ---------------
Gross margin 1,757.5 36.0% 1,478.1 34.2%
Operating expenses
Selling, general and
administrative 1,134.8 23.3% 948.0 21.9%
Depreciation and
amortization 136.8 2.8% 112.4 2.7%
Preopening expenses 22.5 0.4% 18.0 0.4%
------------ ---------------
Operating income 463.4 9.5% 399.7 9.2%
Interest expense, net 30.0 0.6% 40.9 0.9%
------------ ---------------
Income before income taxes 433.4 8.9% 358.8 8.3%
Provision for income taxes 163.8 3.4% 135.6 3.1%
------------ ---------------
Net income $269.6 5.5% $223.2 5.2%
============ ===============
Basic net income per share $0.79 $0.66
Avg. number of shares 340.7 338.5
Diluted net income per share $0.78 $0.65
Avg. number of shares 344.0 343.1
Kohl's Corporation
------------------
Condensed Consolidated Balance Sheets
-------------------------------------
(In Thousands)
(Unaudited)
Subject to Reclassification
July 31, August 2,
2004 2003
----------- -----------
Assets
Current assets:
Cash and cash equivalents $105,173 $107,978
Short-term investments 164,043 35,036
Accounts receivable trade, net 1,093,455 950,142
Merchandise inventories 1,776,212 1,716,763
Deferred income taxes 37,804 34,146
Other 82,501 77,347
----------- -----------
Total current assets 3,259,188 2,921,412
Property and equipment, net 3,666,871 2,980,460
Favorable lease rights, net 230,533 186,088
Goodwill 9,338 9,338
Other assets 106,660 101,887
----------- -----------
Total assets $7,272,590 $6,199,185
=========== ===========
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable $788,707 $701,852
Accrued liabilities 443,346 295,211
Income taxes payable 106,977 57,542
Current portion of long-term debt and capital
leases 2,843 12,440
----------- -----------
Total current liabilities 1,341,873 1,067,045
Long-term debt and capital leases 1,091,421 1,064,174
Deferred income taxes 275,318 205,257
Other long-term liabilities 75,823 69,245
Shareholders' equity 4,488,155 3,793,464
----------- -----------
Total liabilities and shareholders' equity $7,272,590 $6,199,185
=========== ===========
Kohl's Corporation
------------------
Condensed Consolidated Statements of Cash Flows
-----------------------------------------------
(In Thousands)
(Unaudited)
Subject to Reclassification
6 Months Ended
------------------------
July 31, August 2,
2004 2003
------------ -----------
Operating activities
Net income $269,569 $223,158
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 137,160 119,047
Amortization of debt discount 108 3,468
Deferred income taxes 50,624 55,853
Changes in operating assets and
liabilities:
Accounts receivable, net 56,702 40,668
Merchandise inventories (169,222) (89,767)
Other current assets (11,664) (33,633)
Accounts payable 256,108 51,121
Accrued and other long-term liabilities 5,198 (60,245)
Income taxes (17,395) (52,936)
------------ -----------
Net cash provided by operating activities 577,188 256,734
Investing activities
Acquisition of property and equipment and
favorable lease rights (443,317) (334,646)
Net (purchases) sales of short-term investments (129,758) 440,955
Other (16,359) (13,814)
------------ -----------
Net cash (used in) provided by investing
activities (589,434) 92,495
Financing activities
Repayments of convertible and other long-term
debt (11,559) (357,868)
Payments of financing fees on debt (62) (185)
Proceeds from stock option exercises 16,292 26,717
------------ -----------
Net cash provided by (used in) financing
activities 4,671 (331,336)
------------ -----------
Net (decrease) increase in cash and cash
equivalents (7,575) 17,893
Cash and cash equivalents at beginning of
period 112,748 90,085
------------ -----------
Cash and cash equivalents at end of period $105,173 $107,978
============ ===========
--------------------------------------------------------------------------------
Contact:
Kohl's Corporation
Wes McDonald (Investor Relations), 262-703-1893
or
Vicki Shamion (Media), 262-703-1464 |
