Kohl's Reports Fourth Quarter and Full Year Fiscal 2022 Financial Results
Kohl’s Corporation (NYSE:KSS) today reported results for the quarter and year ended January 28, 2023.
Tom Kingsbury, Kohl’s chief executive officer, stated, “Kohl’s fourth quarter results reflect meaningful proactive measures we took to better position the business for 2023, as well as sales pressure driven by the ongoing persistent inflationary environment. Kohl’s has a solid foundation and a highly motivated team with a set of priorities to capitalize on what I see as a substantial opportunity to make a difference in the retail landscape.”
Mr. Kingsbury continued, “Our efforts to drive the business are already underway. We are refining our strategy and re-establishing merchandise disciplines with a customer-centric focus across the organization. I am confident that our efforts will drive improved, and more consistent, sales and earnings performance over the long-term.”
Fourth Quarter 2022 Results
Comparisons refer to the 13-week period ended January 28, 2023 versus the 13-week period ended January 29, 2022
Fiscal Year 2022 Results
Comparisons refer to the 52-week period ended January 28, 2023 versus the 52-week period ended January 29, 2022
2023 Financial and Capital Allocation Outlook
For the full year 2023, the Company currently expects the following:
Fourth Quarter 2022 Earnings Conference Call
Kohl’s will host its quarterly earnings conference call at 9:00 am ET on March 1, 2023. A webcast of the conference call and the related presentation materials will be available via the Company's web site at investors.kohls.com, both live and after the call.
Cautionary Statement Regarding Forward-Looking Information and Non-GAAP Measures
This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. The Company 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 the Company's actual results to differ materially from those anticipated by the forward-looking statements. These risks and uncertainties include, but are not limited to, risks described more fully in Item 1A in the Company’s Annual Report on Form 10-K and Item 1A of Part II of the Company’s Quarterly Report on Form 10-Q for the first quarter of fiscal 2022, which are expressly incorporated herein by reference, and other factors as may periodically be described in the Company’s filings with the SEC. Forward-looking statements relate to the date initially made, and Kohl’s undertakes no obligation to update them.
In this press release, the Company provides information regarding adjusted net (loss) income and adjusted diluted (loss) earnings per share, which are not recognized terms under U.S. generally accepted accounting principles (“GAAP”) and do not purport to be alternatives to net income as a measure of operating performance. A reconciliation of adjusted net (loss) income and adjusted diluted (loss) earnings per share is provided in this release. The Company believes that the use of these non-GAAP financial measures provides investors with enhanced visibility into its results with respect to the impact of certain costs. Because not all companies use identical calculations, these presentations may not be comparable to other similarly titled measures of other companies.
About Kohl's
Kohl’s (NYSE: KSS) is a leading omnichannel retailer. With more than 1,100 stores in 49 states and the online convenience of Kohls.com and the Kohl's App, Kohl's offers amazing national and exclusive brands at incredible savings for families nationwide. Kohl’s is uniquely positioned to deliver against its strategy and its vision to be the most trusted retailer of choice for the active and casual lifestyle. Kohl’s is committed to progress in its diversity and inclusion pledges, and the company's environmental, social, and corporate governance (ESG) stewardship. For a list of store locations or to shop online, visit Kohls.com. For more information about Kohl’s impact in the community or how to join our winning team, visit Corporate.Kohls.com or follow @KohlsNews on Twitter.
KOHL’S CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended
Twelve Months Ended
(Dollars in Millions, Except per Share Data)
January 28,
2023
January 29,
2022
January 28,
2023
January 29,
2022
Net sales
$
5,775
$
6,220
$
17,161
$
18,471
Other revenue
244
279
937
962
Total revenue
6,019
6,499
18,098
19,433
Cost of merchandise sold
4,444
4,155
11,457
11,437
Gross margin rate
23.0
%
33.2
%
33.2
%
38.1
%
Operating expenses:
Selling, general, and administrative
1,677
1,687
5,587
5,478
As a percent of total revenue
27.9
%
26.0
%
30.9
%
28.2
%
Depreciation and amortization
200
207
808
838
Operating (loss) income
(302
)
450
246
1,680
Interest expense, net
78
65
304
260
Loss on extinguishment of debt
—
—
—
201
(Loss) Income before income taxes
(380
)
385
(58
)
1,219
(Benefit) Provision for income taxes
(107
)
86
(39
)
281
Net (loss) income
$
(273
)
$
299
$
(19
)
$
938
Average number of shares:
Basic
110
134
120
146
Diluted
110
136
120
148
(Loss) Earnings per share:
Basic
$
(2.49
)
$
2.23
$
(0.15
)
$
6.41
Diluted
$
(2.49
)
$
2.20
$
(0.15
)
$
6.32
ADJUSTED NET (LOSS) INCOME AND DILUTED (LOSS) EARNINGS PER SHARE, NON-GAAP FINANCIAL MEASURES
(Unaudited)
Three Months Ended
Twelve Months Ended
(Dollars in Millions, Except per Share Data)
January 28,
2023
January 29,
2022
January 28,
2023
January 29,
2022
Net (loss) income
GAAP
$
(273
)
$
299
$
(19
)
$
938
Loss on extinguishment of debt
—
—
—
201
Income tax impact of items noted above
—
—
—
(50
)
Adjusted (non-GAAP)(1)
$
(273
)
$
299
$
(19
)
$
1,089
Diluted (loss) earnings per share
GAAP
$
(2.49
)
$
2.20
$
(0.15
)
$
6.32
Loss on extinguishment of debt
—
—
—
1.35
Income tax impact of items noted above
—
—
—
(0.34
)
Adjusted (non-GAAP)(1)
$
(2.49
)
$
2.20
$
(0.15
)
$
7.33
(1)
Amounts shown for the three and twelve months ended January 28, 2023 and the three months ended January 29, 2022 are GAAP as there are no adjustments to Non-GAAP. These amounts are shown for comparability purposes.
KOHL’S CORPORATION
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Dollars in Millions)
January 28,
2023
January 29,
2022
Assets
Current assets:
Cash and cash equivalents
$
153
$
1,587
Merchandise inventories
3,189
3,067
Other
394
369
Total current assets
3,736
5,023
Property and equipment, net
7,926
7,304
Operating leases
2,304
2,248
Other assets
379
479
Total assets
$
14,345
$
15,054
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable
$
1,330
$
1,683
Accrued liabilities
1,220
1,340
Borrowings under revolving credit facility
85
—
Current portion of:
Long-term debt
275
—
Finance leases and financing obligations
94
118
Operating leases
111
145
Total current liabilities
3,115
3,286
Long-term debt
1,637
1,910
Finance leases and financing obligations
2,786
2,133
Operating leases
2,578
2,479
Deferred income taxes
129
206
Other long-term liabilities
337
379
Shareholders' equity
3,763
4,661
Total liabilities and shareholders' equity
$
14,345
$
15,054
KOHL’S CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Twelve Months Ended
(Dollars in Millions)
January 28,
2023
January 29,
2022
Operating activities
Net (loss) income
$
(19
)
$
938
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation and amortization
808
838
Share-based compensation
30
48
Deferred income taxes
(84
)
(92
)
Loss on extinguishment of debt
—
201
Non-cash lease expense
106
139
Other non-cash expenses
30
12
Changes in operating assets and liabilities:
Merchandise inventories
(116
)
(467
)
Other current and long-term assets
87
569
Accounts payable
(353
)
206
Accrued and other long-term liabilities
(99
)
21
Operating lease liabilities
(108
)
(142
)
Net cash provided by operating activities
282
2,271
Investing activities
Acquisition of property and equipment
(826
)
(605
)
Proceeds from sale of real estate
43
35
Net cash used in investing activities
(783
)
(570
)
Financing activities
Proceeds from issuance of debt
—
500
Net borrowings under revolving credit facility
85
—
Deferred financing costs
(6
)
(8
)
Treasury stock purchases
(658
)
(1,355
)
Shares withheld for taxes on vested restricted shares
(21
)
(27
)
Dividends paid
(239
)
(147
)
Reduction of long-term borrowings
—
(1,044
)
Premium paid on redemption of debt
—
(192
)
Finance lease and financing obligation payments
(106
)
(125
)
Proceeds from financing obligations
11
15
Proceeds from stock option exercises
1
1
Other
—
(3
)
Net cash used in financing activities
(933
)
(2,385
)
Net decrease in cash and cash equivalents
(1,434
)
(684
)
Cash and cash equivalents at beginning of period
1,587
2,271
Cash and cash equivalents at end of period
$
153
$
1,587
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