Company Overview - Kohl's Corporation operates department stores in the U.S. with a total of 1,175 locations, making it the largest department store chain in the country [1] - The company sells both branded and private label products, including apparel, home products, beauty products, and other categories [1] Investment Philosophy - The investment philosophy focuses on identifying mispriced securities by understanding the drivers behind a company's financials, often revealed through a DCF model valuation [2] - This methodology allows for a flexible approach to investing, considering all prospects of a stock to determine the risk-to-reward ratio [2]

Core Viewpoint - Kohl's Corporation is under investigation for potential violations of federal securities laws and unlawful business practices following the termination of its CEO due to undisclosed conflicts of interest in vendor transactions [1][2]. Group 1: Company Actions - On May 1, 2025, Kohl's announced the termination of its CEO for violating company policy by engaging in vendor transactions that involved undisclosed conflicts of interest [2]. - The CEO directed the company to conduct business with a vendor he had a personal relationship with, under unusual terms favorable to the vendor, and facilitated a multi-million dollar consulting agreement involving the same individual [2]. Group 2: Market Reaction - Following the news of the CEO's termination, Kohl's stock experienced a significant drop accompanied by unusually heavy trading volume [2]. Group 3: Legal Investigation - Bragar Eagel & Squire, P.C. is investigating potential claims on behalf of Kohl's stockholders regarding the company's actions and possible violations of securities laws [1].

Ashley Buchanan’s tenure as CEO of department store chain Kohl’s was short-lived.Buchanan, who became chief executive of Kohl’s Jan. 15, was fired Wednesday (April 30) after an investigation determined he violated company policy by directing Kohl’s to enter into a multimillion-dollar consulting contract with a vendor despite “undisclosed conflicts of interest,” per a regulatory filing with the Securities and Exchange Commission.Buchanan had a personal relationship with that vendor, and the agreement include ...

Core Points - Kohl's terminated its new CEO, Ashley Buchanan, less than four months after his appointment due to ethical violations [1][2] - An investigation revealed that Buchanan directed the company to engage with a vendor with whom he had a personal relationship, resulting in favorable terms for the vendor [2] - Buchanan failed to disclose this personal relationship, violating the company's code of ethics [2] Company Actions - Following Buchanan's termination, the board decided to withdraw his nomination for election as a director at the upcoming annual meeting of shareholders [3] - Buchanan is required to forfeit all equity awards and reimburse $2,500,000 of his signing incentive [3] - The board will initiate a search for a permanent replacement, appointing Michael J. Bender as interim CEO [3]

Core Viewpoint - Kohl's terminated its CEO Ashley Buchanan after just four months due to violations of the company's conflict of interest policies, which involved undisclosed vendor relationships [1][2][4]. Group 1: CEO Termination - Ashley Buchanan was fired for directing Kohl's to engage in vendor transactions that involved undisclosed conflicts of interest [1][4]. - An investigation led by an outside law firm, overseen by Kohl's audit committee, confirmed that Buchanan failed to disclose inappropriate vendor relationships [2]. - Michael Bender, a board member since July 2019, has been appointed as Interim CEO effective immediately [4]. Group 2: Financial Implications - Following the news of Buchanan's termination, Kohl's shares increased by nearly 6%, reaching $7.09 [4]. - Buchanan will forfeit all equity awards and is required to reimburse Kohl's a pro-rated signing award worth $2.5 million [5]. - The company reported preliminary financial results indicating that comparable sales are expected to decline by 4% to 4.3% for the first quarter [7]. Group 3: Leadership Instability - Kohl's has experienced a high turnover of CEOs, with Buchanan being the third CEO in three years, following Tom Kingsbury and Michelle Gass [7][8].

Kohl's announced on Thursday that it fired CEO Ashley Buchanan after an investigation found he violated company policies. The retailer said its board terminated Buchanan after the investigation "determined Mr. Buchanan violated company policies by directing the Company to engage in vendor transactions that involved undisclosed conflicts of interest." His termination did not have anything to do with the company's "performance, financial reporting, results of operations," nor did it involve any other employee ...

Core Viewpoint - Kohl's terminated Ashley Buchanan as CEO for cause after an investigation revealed violations of company policies regarding conflicts of interest with certain vendors [1][2] Group 1: Termination Details - The termination was based on findings that Buchanan directed the company to engage with a vendor he had personal ties to [2] - The investigation uncovered that unusual terms favorable to the vendor were issued under Buchanan's direction [2] - Buchanan was responsible for a multimillion-dollar consulting agreement involving the same individual connected to the vendor [2]

Company Overview - Kohl's shares increased by 8% to $7.17 in the last trading session, with a higher-than-average trading volume, despite a 40.9% loss over the past four weeks [1] - The company is focusing on effective inventory and expense management, with key growth categories including Sephora, home decor, and impulse items, contributing to its recent success [2] Financial Performance - Kohl's is expected to report a quarterly loss of $0.53 per share, reflecting a year-over-year decline of 120.8%, with revenues projected at $3.13 billion, down 7.5% from the same quarter last year [2] - The consensus EPS estimate for Kohl's has been revised 94% lower in the last 30 days, indicating a negative trend in earnings estimate revisions, which typically does not lead to price appreciation [4] Industry Context - Kohl's operates within the Zacks Retail - Regional Department Stores industry, where another competitor, Dillard's, saw a 1.1% decrease in its stock price, with a return of -11.1% over the past month [4] - Dillard's consensus EPS estimate has changed by -2.1% to $9.10, representing a year-over-year change of -17.9%, and it currently holds a Zacks Rank of 4 (Sell) [5]

Core Viewpoint - Kohl's stock has faced significant declines, dropping nearly 22% week to date, following the announcement of a top executive's departure and a critical analyst report [1]. Executive Departure - Kohl's chief technology and digital officer, Siobhán McFeeney, announced her departure in a regulatory filing, with no information provided on her successor or ongoing search for a replacement [2]. Digital Operations Concerns - The retail sector's competitiveness makes a strong digital operation essential, and the sudden exit of a key executive raises concerns about Kohl's ability to maintain its online sales performance [3]. Analyst Recommendations - UBS analyst Jay Sole reiterated a sell recommendation for Kohl's stock, setting a price target of $5, citing the company's struggles in competitiveness regarding price, products, and service [3][4]. Market Positioning - The analyst's view suggests that Kohl's operates like a traditional brick-and-mortar retailer, failing to adapt to modern retail challenges, indicating a cautious outlook for the stock [5].

Employee and Workplace Culture - The average employee count for 2024 was approximately 87,000 associates, including about 33,000 full-time and 54,000 part-time associates[17]. - The company offers a 100% match (up to 5% of pay) in its 401(k) Savings Plan after one year of employment for eligible associates[23]. - The company has eight Business Resource Groups (BRGs) with over 10,000 unique members to foster inclusion and belonging[20]. - The company emphasizes a culture of safety and wellness, providing associates with 24/7 access to medical professionals following work accidents[18]. Financial Performance - The company reported net sales of $15.385 billion for the fiscal year 2024, down 7.2% from $16.586 billion in 2023[226]. - Total revenue for 2024 was $16.221 billion, a decrease of 7.2% compared to $17.476 billion in 2023[226]. - The company's net income for 2024 was $109 million, a decline of 65.6% from $317 million in 2023[226]. - Operating income for 2024 was $433 million, a decrease from $717 million in 2023[226]. - Net sales for 2024 totaled $15,385 million, a decrease of 7.2% from $16,586 million in 2023[259]. - Women's category sales decreased to $3,817 million in 2024 from $4,281 million in 2023, representing a decline of 10.8%[259]. Assets and Liabilities - As of February 1, 2025, the company's merchandise inventories balance was $2.9 billion, an increase from $2.88 billion the previous year[213]. - The company reported a decrease in total assets from $14.009 billion in 2024 to $13.559 billion in 2025[224]. - The company’s total shareholders' equity decreased to $3.802 billion from $3.893 billion in the previous year[224]. - Accrued liabilities increased to $1,263 million in 2025 from $1,201 million in 2024, reflecting a rise of 5.2%[247]. - The company had $97 million in obligations under the supplier financing program as of February 1, 2025, up from $19 million in 2024[249]. - Total lease liabilities amounted to $4.885 billion as of February 1, 2025, down from $5.199 billion in February 2024[287]. Debt and Financing - Outstanding borrowings under the $1.5 billion revolving credit facility were $290 million as of February 1, 2025[202]. - The company is subject to interest rate risk due to $500 million of notes issued in March 2021, which include coupon rate step-ups if the long-term debt is downgraded[201]. - Long-term unsecured senior debt decreased from $1.638 billion in February 2024 to $1.174 billion in February 2025, with an effective interest rate at issuance of 4.73%[277]. - The company completed a voluntary redemption of $113 million of 9.50% notes in June 2024, recognizing a $5 million loss on extinguishment of debt[278]. - Future lease payments total $8.672 billion, including $4.990 billion for operating leases and $3.682 billion for finance leases[287]. Tax and Regulatory Matters - The company had gross unrecognized tax benefits of $184 million as of February 1, 2025, indicating potential tax liabilities[217]. - The effective tax rate for 2024 was 3.9%, significantly lower than 15.1% in 2023 and 68.1% in 2022[296]. - The company recorded a tax provision of $5 million in 2024, compared to $56 million in 2023 and a tax benefit of $39 million in 2022[296]. - The balance of unrecognized tax benefits was $184 million as of February 1, 2025, down from $200 million in 2023[298]. Shareholder Information - The company retired 35 million shares of treasury stock in 2024, following the retirement of 217 million shares in 2023[257]. - The company had 111 million basic shares outstanding in 2024, compared to 110 million in 2023, with diluted shares increasing from 111 million to 112 million[270]. - The company had 7.7 million shares authorized and 6.3 million shares available for grant under the 2024 Long-Term Compensation Plan as of February 1, 2025[302]. - Nonvested stock awards increased to 4.863 million shares by the end of 2024 from 3.099 million shares in 2023[306]. - A quarterly cash dividend of $0.125 per share was declared on March 11, 2025, to be paid on April 2, 2025[315]. Internal Controls and Audits - Management assessed the effectiveness of internal control over financial reporting as of February 1, 2025, concluding it was effective based on COSO criteria[322]. - Ernst & Young LLP audited the internal control over financial reporting and expressed an unqualified opinion on its effectiveness as of February 1, 2025[325]. - There were no changes in internal control over financial reporting during fiscal 2024 that materially affected its effectiveness[324]. - The company maintained effective disclosure controls and procedures as evaluated by its management[318]. Legal Matters - The company is subject to certain legal proceedings, but management believes the outcomes will not have a material adverse effect on the financial statements[314].