Kohl's 10-Q: Financials and Inventory Update

TL;DR

Kohl's Q2 10-Q is out. Financials look stable, inventory details provided.

AI Summary

Kohl's Corporation (KSS) filed its 10-Q for the period ending August 3, 2024. The filing details financial performance and operational updates. Key financial data points include information on senior notes, revolving credit facilities, and various inventory categories like accessories, footwear, men's, and children's apparel.

Why It Matters

This filing provides investors with a detailed look into Kohl's financial health and inventory management for the second quarter of fiscal year 2024, impacting investment decisions.

Risk Assessment

Risk Level: medium — The filing contains standard financial disclosures for a public company, but the retail sector can be subject to economic volatility.

Key Numbers

• 2024-08-03 — Reporting Period End (Indicates the end of the fiscal quarter for which financial information is reported.)
• 2024-09-05 — Filing Date (The date the 10-Q report was officially submitted to the SEC.)
• 2023-07-29 — Prior Year Period End (Provides a comparative point for financial performance analysis.)

Key Players & Entities

• KOHLS Corp (company) — Filer
• 20240803 (date) — Reporting period end date
• 20240905 (date) — Filing date
• 0000885639 (company) — Central Index Key for KOHLS Corp
• Senior Notes Due Twenty Forty Five (dollar_amount) — Debt instrument

FAQ

Key Financial Figures

• $0.01 — August 30, 2024 Common Stock, Par Value $0.01 per Share, 111,238,455 sha res outstand
• $3.5 b — include: Net sales decreased 4.2%, to $3.5 billion, with comparable sales down 5.1%.
• $1.2 billion — ve ("SG&A") expenses decreased 4.2%, to $1.2 billion. As a percentage of total revenue, SG&A
• $166 million — year-over-year. Operating income was $166 million compared to $163 million in the prior y
• $163 million — ing income was $166 million compared to $163 million in the prior year. As a percentage of t
• $66 m — points year-over-year. Net income was $66 million, or $0.59 per diluted share. This
• $0.59 — -year. Net income was $66 million, or $0.59 per diluted share. This compares to net
• $58 m — d share. This compares to net income of $58 million, or $0.52 per diluted share in th
• $0.52 — mpares to net income of $58 million, or $0.52 per diluted share in the prior year.
• $3.2 b — hare in the prior year. Inventory was $3.2 billion, a decrease of 9% to last year.
• $254 million — to last year. Operating cash flow was $254 million as compared to $430 million in the prio
• $430 million — sh flow was $254 million as compared to $430 million in the prior year. Long-term debt was
• $113 million — r year. Long-term debt was reduced by $113 million through the redemption of the remaining
• $1.75 — ted earnings per share: In the range of $1.75 to $2.25 Capital expenditures: Approx
• $2.25 — ngs per share: In the range of $1.75 to $2.25 Capital expenditures: Approximately $

Filing Documents

• kss-20240803.htm (10-Q) — 790KB
• kss-ex10_2.htm (EX-10.2) — 106KB
• kss-ex10_3.htm (EX-10.3) — 47KB
• kss-ex10_4.htm (EX-10.4) — 28KB
• kss-ex10_5.htm (EX-10.5) — 29KB
• kss-ex31_1.htm (EX-31.1) — 15KB
• kss-ex31_2.htm (EX-31.2) — 15KB
• kss-ex32_1.htm (EX-32.1) — 8KB
• kss-ex32_2.htm (EX-32.2) — 8KB
• img74276493_0.jpg (GRAPHIC) — 51KB
• 0000950170-24-103988.txt ( ) — 3901KB
• kss-20240803.xsd (EX-101.SCH) — 611KB
• kss-20240803_htm.xml (XML) — 423KB

Financial Statements

Financial Statements: 3 Consolidated Balance Sheets 3 Consolidated Statements of Operations 4 Consolidated Statements of Changes in Shareholders' Equity 5 Consolidated Statements of Cash Flows 6

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements 7 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 11 Item 3.

Quantitative and Qualitative Disclosures about Market Risk

Quantitative and Qualitative Disclosures about Market Risk 18 Item 4.

Controls and Procedures

Controls and Procedures 18 PART II OTHER INFORMATION 20 Item 1.

Legal Proceedings

Legal Proceedings 20 Item 1A.

Risk Factors

Risk Factors 20 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 20 Item 5. Other Information 20 Item 6. Exhibits 21

Signatures

Signatures 22 Table of Contents

FINANCI AL INFORMATION

PART I. FINANCI AL INFORMATION

Financi al Statements

Item 1. Financi al Statements KOHL'S CORPORATION CONSOLIDATED B ALANCE SHEETS (Dollars in Millions) August 3, 2024 February 3, 2024 July 29, 2023 Assets (Unaudited) (Audited) (Unaudited) Current assets: Cash and cash equivalents $ 231 $ 183 $ 204 Merchandise inventories 3,151 2,880 3,474 Other 331 347 296 Total current assets 3,713 3,410 3,974 Property and equipment, net 7,502 7,720 7,945 Operating leases 2,507 2,499 2,493 Other assets 458 380 382 Total assets $ 14,180 $ 14,009 $ 14,794 Liabilities and Shareholders' Equity Current liabilities: Accounts payable $ 1,317 $ 1,134 $ 1,376 Accrued liabilities 1,185 1,201 1,246 Borrowings under revolving credit facility 410 92 560 Current portion of: Long-term debt 353 — 111 Finance leases and financing obligations 81 83 84 Operating leases 92 102 93 Total current liabilities 3,438 2,612 3,470 Long-term debt 1,173 1,638 1,637 Finance leases and financing obligations 2,574 2,680 2,730 Operating leases 2,795 2,781 2,777 Deferred income taxes 95 107 121 Other long-term liabilities 275 298 324 Shareholders' equity: Common stock 2 2 2 Paid-in capital 3,546 3,528 3,502 Treasury stock, at cost ( 2,579 ) ( 2,571 ) ( 2,569 ) Retained earnings 2,861 2,934 2,800 Total shareholders' equity $ 3,830 $ 3,893 $ 3,735 Total liabilities and shareholders' equity $ 14,180 $ 14,009 $ 14,794 See accompanying Notes to Consolidated Financial Statements 3 Table of Contents KOHL'S CORPORATION CONSOLIDATED STAT EMENTS OF OPERATIONS (Unaudited) Three Months Ended Six Months Ended (Dollars in Millions, Except per Share Data) August 3, 2024 July 29, 2023 August 3, 2024 July 29, 2023 Net sales $ 3,525 $ 3,678 $ 6,703 $ 7,033 Other revenue 207 217 411 433 Total revenue 3,

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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, 2024 (Commission File No. 1-11084) as filed with the Securities and Exchange Commission ("SEC"). Due to the seasonality of the business of Kohl's Corporation (the "Company," "Kohl's," "we," "our," or "us"), 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. Recent Accounting Pronouncements Accounting Standards Issued and Adopted There are no recently adopted accounting pronouncements that had a material impact on our financial statements. Accounting Standards Issued but not yet Effective Standard Description Effect on our Financial Statements Segment Reporting (ASU 2023-07) Issued November 2023 Effective for Fiscal Years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024 The amendments in this ASU improve reportable segment disclosure requirements, primarily through enhanced disclosures around significant segment expenses. We are evaluating the impact of the new required disclosures on our financial statements but do not expect the effect of the adoption to be material. Income Taxes (ASU 2023-09) Issued December 2023 Effective for Fiscal Ye

Management's Discussion and Analysis o f Financial Condition and Results of Operations

Item 2. Management's Discussion and Analysis o f 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 3, 2024 or July 29, 2023. References to "year to date" and "first half" are for the six fiscal months (26 weeks) ended August 3, 2024 or July 29, 2023. 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 include the statements under management's discussion and analysis, financial and capital allocation outlook and 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 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 2023 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. Executive Summary Kohl's is a leading omnichannel retailer operating 1,176 stores and a website (www.Kohls.com) as of August 3, 2024. Our Kohl's stores and website sell m

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View this 10-Q filing on SEC EDGAR