MENOMONEE FALLS, Wis.--(BUSINESS WIRE)--Kohl’s Corporation (NYSE:KSS) today reported results for the quarter and year ended January 30, 2021.

	Three Months									Twelve Months
($ in millions, except per share data)	2020			2019			Change			2020			2019			Change
Total revenue	$	6,141		$	6,832			(10.1	)%	$	15,955		$	19,974			(20.1	)%
Net sales⁽¹⁾		(10.1	)%		0.0	%					(20.4	)%		(1.5	)%
Gross margin		32.0	%		32.7	%	(73) bps				31.1	%		35.7	%	(464) bps
Selling, general, and administrative expenses	$	1,603		$	1,742			(8.0	)%	$	5,021		$	5,705			(12.0	)%
Reported
Net income (loss)	$	343		$	265			29	%	$	(163	)	$	691			(124	)%
Diluted earnings (loss) per share	$	2.20		$	1.72			28	%	$	(1.06	)	$	4.37			(124	)%
Non-GAAP⁽²⁾
Adjusted net income (loss)	$	346		$	308			12	%	$	(186	)	$	769			(124	)%
Adjusted diluted earnings (loss) per share	$	2.22		$	1.99			12	%	$	(1.21	)	$	4.86			(125	)%

(1)		Represents change in Net sales vs. prior year period.
(2)		Excludes Impairments, store closing, and other costs, (Gain) on sale of real estate, and (Gain) on extinguishment of debt.

"After an extraordinary year managing through the pandemic, we ended the year in a very solid financial position, and we enter 2021 with strong momentum. We are pleased with the progress we are making against our strategic initiatives and we are set up to deliver a multi-year improvement in sales and operating margin. Several newly announced initiatives will come to life for our customers in the year ahead, most importantly the launch of our Sephora partnership in August,” said Michelle Gass, Kohl’s chief executive officer.

“We are committed to driving shareholder value and based on our strong financial outlook we are resuming our capital allocation strategy in 2021,” said Gass.

2021 Financial Outlook

The Company currently expects full year 2021 net sales to increase in the mid-teens percentage range as compared to the prior year, operating margin to be in the range of 4.5% to 5.0%, and earnings per share to be in the range of $2.45 to $2.95, excluding any non-recurring charges.

2021 Capital Allocation Strategy

The Company plans to resume its capital allocation strategy in 2021, including increasing capital expenditures, reinstating dividend, resuming share repurchase program, and employing liability management strategies.

Capital expenditures: $550 million to $600 million, including the launch of its Sephora partnership, the opening of its sixth e-commerce fulfillment center and store refresh activity
Dividend: On February 24, 2021, Kohl’s Board of Directors declared a quarterly cash dividend on the Company’s common stock of $0.25 per share. The dividend is payable March 31, 2021 to shareholders of record at the close of business on March 17, 2021.
Share repurchase program: $200 million to $300 million

Fourth Quarter 2020 Earnings Conference Call

Kohl's will host its quarterly earnings conference call at 9:00 am ET on March 2, 2021. 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 in Item 1A of Part II in the Company's Quarterly Report on Form 10-Q for the quarter ended May 2, 2020, 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 income (loss) and adjusted diluted earnings (loss) 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 income (loss) and adjusted diluted earnings (loss) 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 30, 2021			February 1, 2020			January 30, 2021			February 1, 2020
Net sales	$	5,879		$	6,537		$	15,031		$	18,885
Other revenue		262			295			924			1,089
Total revenue		6,141			6,832			15,955			19,974
Cost of merchandise sold		4,000			4,400			10,360			12,140
Gross margin rate		*32.0*	%		32.7	%		*31.1*	%		35.7	%
Operating expenses:
Selling, general, and administrative		1,603			1,742			5,021			5,705
As a percent of total revenue		*26.1*	%		25.5	%		*31.5*	%		28.6	%
Depreciation and amortization		218			232			874			917
Impairments, store closing, and other		4			57			89			113
(Gain) on sale of real estate		—			—			(127	)		—
Operating income (loss)		316			401			(262	)		1,099
Interest expense, net		70			50			284			207
(Gain) on extinguishment of debt		—			—			—			(9	)
Income (loss) before income taxes		246			351			(546	)		901
(Benefit) provision for income taxes		(97	)		86			(383	)		210
Net income (loss)	$	343		$	265		$	(163	)	$	691
Average number of shares:
Basic		154			154			154			157
Diluted		156			154			154			158
Earnings (loss) per share:
Basic	$	2.23		$	1.72		$	(1.06	)	$	4.39
Diluted	$	2.20		$	1.72		$	(1.06	)	$	4.37

ADJUSTED NET INCOME (LOSS) AND DILUTED EARNINGS (LOSS) PER SHARE, NON-GAAP FINANCIAL MEASURES
(Unaudited)

	Three Months Ended						Twelve Months Ended
(Dollars in Millions, Except per Share Data)	January 30, 2021			February 1, 2020			January 30, 2021			February 1, 2020
Net income (loss)
GAAP	$	343		$	265		$	(163	)	$	691
Impairments, store closing, and other		4			57			89			113
(Gain) on sale of real estate		—			—			(127	)		—
(Gain) on extinguishment of debt		—			—			—			(9	)
Income tax impact of items noted above		(1	)		(14	)		15			(26	)
Adjusted (non-GAAP)	$	346		$	308		$	(186	)	$	769
Diluted earnings (loss) per share
GAAP	$	2.20		$	1.72		$	(1.06	)	$	4.37
Impairments, store closing, and other		0.03			0.37			0.58			0.71
(Gain) on sale of real estate		—			—			(0.82	)		—
(Gain) on extinguishment of debt		—			—			—			(0.06	)
Income tax impact of items noted above		(0.01	)		(0.10	)		0.09			(0.16	)
Adjusted (non-GAAP)	$	2.22		$	1.99		$	(1.21	)	$	4.86

KOHL’S CORPORATION
CONSOLIDATED BALANCE SHEETS
(Unaudited)

(Dollars in Millions)	January 30, 2021		February 1, 2020
Assets
Current assets:
Cash and cash equivalents	$	2,271	$	723
Merchandise inventories		2,590		3,537
Other		974		389
Total current assets		5,835		4,649
Property and equipment, net		6,689		7,352
Operating leases		2,398		2,391
Other assets		415		163
Total assets	$	15,337	$	14,555
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable	$	1,476	$	1,206
Accrued liabilities		1,270		1,281
Current portion of:
Finance leases and financing obligations		115		124
Operating leases		161		158
Total current liabilities		3,022		2,769
Long-term debt		2,451		1,856
Finance leases and financing obligations		1,387		1,367
Operating leases		2,625		2,619
Deferred income taxes		302		260
Other long-term liabilities		354		234
Shareholders' equity		5,196		5,450
Total liabilities and shareholders' equity	$	15,337	$	14,555

KOHL’S CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

	Twelve Months Ended
(Dollars in Millions)	January 30, 2021			February 1, 2020
Operating activities
Net (loss) income	$	(163	)	$	691
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation and amortization		874			917
Share-based compensation		40			56
Deferred income tax expense		18			51
Impairments, store closing, and other costs		64			64
(Gain) on extinguishment of debt		—			(9	)
(Gain) on sale of real estate		(127	)		—
Non-cash inventory costs		187			—
Non-cash lease expense		149			150
Other non-cash expense		22			11
Changes in operating assets and liabilities:
Merchandise inventories		768			(51	)
Other current and long-term assets		(813	)		48
Accounts payable		270			19
Accrued and other long-term liabilities		199			(134	)
Operating lease liabilities		(150	)		(156	)
Net cash provided by operating activities		1,338			1,657
Investing activities
Acquisition of property and equipment		(334	)		(855	)
Proceeds from sale of real estate		197			—
Other		—			18
Net cash used in investing activities		(137	)		(837	)
Financing activities
Proceeds from issuance of debt		2,097			—
Deferred financing costs		(19	)		—
Treasury stock purchases		(8	)		(470	)
Shares withheld for taxes on vested restricted shares		(22	)		(31	)
Dividends paid		(108	)		(423	)
Reduction of long-term borrowings		(1,497	)		(6	)
Finance lease and financing obligation payments		(105	)		(113	)
Proceeds from stock option exercises		—			1
Proceeds from financing obligations		9			11
Net cash provided by (used in) financing activities		347			(1,031	)
Net increase (decrease) in cash and cash equivalents		1,548			(211	)
Cash and cash equivalents at beginning of period		723			934
Cash and cash equivalents at end of period	$	2,271		$	723

Kohl's Reports Financial Results