Kohl’s(KSS) - 2025 Q3 - Quarterly Results

Third Quarter 2024 Performance and CEO Transition Kohl's reported disappointing Q3 2024 results with sales declines, alongside an announced CEO transition - CEO Tom Kingsbury will step down on January 15, 2025, and will be succeeded by retail veteran Ashley Buchanan Kingsbury will remain on the Board of Directors in an advisory role until his retirement in May 2025[4] - The CEO stated that while growth areas like Sephora, home decor, gifting, and the new Babies "R" Us shops performed well, they were unable to offset the sales declines in the core apparel and footwear businesses[3] Q3 2024 Financial Highlights (vs. Q3 2023) | Metric | Q3 2024 (USD) | Change (YoY) | | :--- | :--- | :--- | | Net Sales | $3.5 billion | -8.8% | | Comparable Sales | N/A | -9.3% | | Gross Margin | 39.1% | +20 bps | | Operating Income | $98 million | -37.6% | | Net Income | $22 million | -62.7% | | Diluted EPS | $0.20 | -62.3% | | Inventory | $4.1 billion | -3.0% | Nine Months 2024 Financial Highlights (vs. Nine Months 2023) | Metric | Nine Months 2024 (USD) | Change (YoY) | | :--- | :--- | :--- | | Net Sales | $10.2 billion | -6.1% | | Comparable Sales | N/A | -6.4% | | Gross Margin | 39.4% | +42 bps | | Operating Income | $307 million | -26.6% | | Net Income | $61 million | -53.4% | | Diluted EPS | $0.55 | -53.4% | | Operating Cash Flow | $52 million | -86.3% | Updated 2024 Financial Outlook Kohl's updated its full-year 2024 guidance, projecting sales decline and revised EPS, and declared a dividend Full Year 2024 Financial Outlook | Metric | Expected Range/Value | | :--- | :--- | | Net Sales | -7% to -8% | | Comparable Sales | -6% to -7% | | Operating Margin | 3.0% to 3.2% | | Diluted EPS | $1.20 to $1.50 | | Capital Expenditures | Approx. $500 million | - The Board of Directors declared a quarterly cash dividend of $0.50 per share, payable on December 24, 2024, to shareholders of record as of December 11, 2024[7] Consolidated Financial Statements Consolidated financial statements detail Kohl's financial position, showing declines in net income and operating cash flow Consolidated Statements of Operations Statements of operations show significant declines in net sales and net income for Q3 and the first nine months of 2024 Consolidated Statements of Operations (in Millions, Except per Share Data) | Description | Three Months Ended Nov 2, 2024 (USD Millions) | Three Months Ended Oct 28, 2023 (USD Millions) | Nine Months Ended Nov 2, 2024 (USD Millions) | Nine Months Ended Oct 28, 2023 (USD Millions) | | :--- | :--- | :--- | :--- | :--- | | Net sales | $3,507 | $3,843 | $10,210 | $10,876 | | Total revenue | $3,710 | $4,054 | $10,824 | $11,520 | | Gross margin rate | 39.1% | 38.9% | 39.4% | 39.0% | | Operating income | $98 | $157 | $307 | $418 | | Net income | $22 | $59 | $61 | $131 | | Diluted EPS | $0.20 | $0.53 | $0.55 | $1.18 | Consolidated Balance Sheets Balance sheets indicate slight reductions in total assets and inventories, alongside a significant decrease in long-term debt Consolidated Balance Sheets (in Millions) | Description | November 2, 2024 (USD Millions) | October 28, 2023 (USD Millions) | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $174 | $190 | | Merchandise inventories | $4,099 | $4,239 | | Total current assets | $4,617 | $4,720 | | Total assets | $15,054 | $15,467 | | Liabilities & Equity | | | | Accounts payable | $1,873 | $1,918 | | Total current liabilities | $4,393 | $4,156 | | Long-term debt | $1,174 | $1,638 | | Total liabilities | $11,250 | $11,716 | | Shareholders' equity | $3,804 | $3,751 | Consolidated Statements of Cash Flows Statements of cash flows reveal a substantial decrease in net cash from operating activities for the first nine months of 2024 Consolidated Statements of Cash Flows (in Millions) | Description | Nine Months Ended Nov 2, 2024 (USD Millions) | Nine Months Ended Oct 28, 2023 (USD Millions) | | :--- | :--- | :--- | | Net cash provided by operating activities | $52 | $379 | | Net cash used in investing activities | ($363) | ($491) | | Net cash provided by financing activities | $302 | $149 | | Net (decrease) increase in cash | ($9) | $37 | | Cash and cash equivalents at end of period | $174 | $190 |