10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


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

For the quarterly period ended August 3, 2024


☐	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

Securities registered pursuant to Section 12(b) of the Act:

    Title of each class

    Trading 
Symbol(s)

    Name of each exchange on 
which registered

    Common Stock, $.01 par value

    KSS

    New York Stock Exchange

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 every Interactive Data File required to be submitted 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 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.


Large Accelerated Filer	☒	Accelerated Filer	☐
Non-Accelerated Filer	☐	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: August 30, 2024 Common Stock, Par Value $0.01 per Share, 111,238,455 shares outstanding.

KOHL’S CORPORATION

INDEX


PART I	FINANCIAL INFORMATION	3
Item 1.	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	7
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	11
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	18
Item 4.	Controls and Procedures	18

PART II	OTHER INFORMATION	20
Item 1.	Legal Proceedings	20
Item 1A.	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	22


(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


	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	3,732	3,895	7,114	7,466
Cost of merchandise sold	2,128	2,242	4,051	4,289
Operating expenses:
Selling, general, and administrative	1,250	1,304	2,478	2,542
Depreciation and amortization	188	186	376	374
Operating income	166	163	209	261
Interest expense, net	86	89	169	173
Income before income taxes	80	74	40	88
Provision for income taxes	14	16	1	16
Net income	$66	$58	$39	$72
Net income per share:
Basic	$0.59	$0.52	$0.35	$0.65
Diluted	$0.59	$0.52	$0.35	$0.65


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 Years beginning after December 15, 2024	The ASU requires entities to provide additional information in the rate reconciliation table and additional disclosures around income taxes paid.	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.


			Outstanding
Maturity (Dollars in Millions)	Effective Rate at Issuance	Coupon Rate	August 3, 2024	February 3, 2024	July 29, 2023
2023	4.78%	4.75%	$—	$—	$111
2025	9.50%	10.75%	—	113	113
2025	4.25%	4.25%	353	353	353
2029	7.36%	7.25%	42	42	42
2031	3.40%	4.63%	500	500	500
2033	6.05%	6.00%	112	112	112
2037	6.89%	6.88%	101	101	101
2045	5.57%	5.55%	427	427	427
Outstanding unsecured senior debt			1,535	1,648	1,759
Unamortized debt discounts and deferred financing costs			(9)	(10)	(11)
Current portion of unsecured senior debt			(353)	—	(111)
Long-term unsecured senior debt			$1,173	$1,638	$1,637
Effective interest rate at issuance			4.73%	5.06%	5.04%


	Nonvested Restricted Stock Awards and Units		Performance Share Units
(Shares and Units in Thousands)	Shares	Weighted Average Grant Date Fair Value	Units	Weighted Average Grant Date Fair Value
Balance - February 3, 2024	3,099	$29.66	777	$31.26
Granted	1,510	26.26	652	29.33
Vested	(1,024)	30.40	(38)	74.68
Forfeited	(91)	30.58	—	—
Balance - August 3, 2024	3,494	$27.95	1,391	$29.17


	Three Months Ended		Six Months Ended
(Dollars and Shares in Millions, Except per Share Data)	August 3, 2024	July 29, 2023	August 3, 2024	July 29, 2023
Numerator—Net income	$66	$58	$39	$72
Denominator—Weighted-average shares:
Basic	111	110	111	110
Dilutive impact	1	1	1	1
Diluted	112	111	112	111
Net income per share:
Basic	$0.59	$0.52	$0.35	$0.65
Diluted	$0.59	$0.52	$0.35	$0.65


	Three Months Ended		Six Months Ended
(Shares in Millions)	August 3, 2024	July 29, 2023	August 3, 2024	July 29, 2023
Anti-dilutive shares	4	3	4	3


Cash Uses		Cash Sources
• Operational needs, including salaries, rent, taxes, and other operating costs • Inventory • Capital expenditures • Dividend payments • Debt reduction • Share repurchases		• Cash flow from operations • Line of credit under our revolving credit facility • Issuance of debt


	Moody’s	S&P	Fitch
Long-term debt	Ba3	BB	BB
Outlook	Stable	Negative	Stable


(Dollars in Millions, Except per Share Data)	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
May 5 - June 1, 2024	3,001	$26.39	—	$2,476
June 2 - July 6, 2024	15,479	$21.63	—	$2,476
July 7 - Aug 3, 2024	2,997	$22.76	—	$2,476
Total	21,477	$22.45	—


	Three Months Ended		Six Months Ended
(Dollars in Millions)	August 3, 2024	July 29, 2023	August 3, 2024	July 29, 2023
Women's	$1,004	$1,099	$1,927	$2,087
Men's	740	809	1,340	1,504
Accessories (including Sephora)	666	571	1,284	1,083
Home	436	462	828	895
Children's	359	387	703	790
Footwear	320	350	621	674
Net Sales	$3,525	$3,678	$6,703	$7,033


	Three Months Ended			Six Months Ended
(Dollars in Millions)	August 3, 2024	July 29, 2023	Change	August 3, 2024	July 29, 2023	Change
Women's	$1,004	$1,099	(8.6%)	$1,927	$2,087	(7.7%)
Men's	740	809	(8.5%)	1,340	1,504	(10.9%)
Accessories (including Sephora)	666	571	16.6%	1,284	1,083	18.6%
Home	436	462	(5.6%)	828	895	(7.5%)
Children's	359	387	(7.2%)	703	790	(11.0%)
Footwear	320	350	(8.6%)	621	674	(7.9%)
Net Sales	$3,525	$3,678	(4.2%)	$6,703	$7,033	(4.7%)


	Six Months Ended
(Dollars in Millions)	August 3, 2024	July 29, 2023	Change
Net cash provided by (used in):
Operating activities	$247	$228	$19
Investing activities	(237)	(335)	98
Financing activities	38	158	(120)


	Kohl’s Corporation (Registrant)

Date: September 5, 2024	/s/ Jill Timm
	Jill Timm On behalf of the Registrant and as Chief Financial Officer (Principal Financial Officer)


Exhibit		Description
10.1		Kohl’s Corporation 2024 Long-Term Compensation Plan, incorporated by reference to Annex A to the Proxy Statement on Schedule 14A filed on April 5, 2024.
10.2		Form of Executive Performance Share Unit Agreement pursuant to the Kohl's Corporation 2024 Long Term Compensation Plan.
10.3		Form of Executive Restricted Stock Unit Agreement pursuant to the Kohl's Corporation 2024 Long Term Compensation Plan.
10.4		Form of Non-Employee Directors Restricted Stock Agreement pursuant to the Kohl's Corporation 2024 Long Term Compensation Plan.
10.5		Form of Non-Employee Directors Deferred Restricted Stock Unit Agreement pursuant to the Kohl's Corporation 2024 Long Term Compensation Plan.
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		Inline XBRL Instance Document
101.SCH		Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents
104		Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibits 101)

SEC Form 10-Q filed by Kohl's Corporation