Kohl’s(KSS) - 2025 Q4 - Annual Report

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$16.586 billion in 2023[226]. - Total revenue for 2024 was $16.221 billion, a decrease of 7.2$17.476 billion in 2023[226]. - The company's net income for 2024 was $109 million, a decline of 65.6$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$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$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$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].