Kohl’s(KSS) - 2023 Q4 - Annual Report

Employee and Workforce - The average employee count in 2022 was approximately 97,000 associates, including 36,000 full-time and 61,000 part-time associates[23]. - The company maintains positive relations with associates, with no representation by a collective bargaining unit[23]. - The company is dependent on attracting and retaining quality associates, especially during the holiday season, amid intense competition[80]. - The company has a dedicated team for health, safety, and wellness initiatives to ensure a safe working environment[24]. - The company is focused on its Diversity, Equity, and Inclusion strategy, which includes measurable goals and accountability[25]. Financial Performance - Net sales for 2022 were $17,161 million, a decrease of 7.1% from$ 18,471 million in 2021[222]. - Total revenue for 2022 was $18,098 million, down 6.9% from$ 19,433 million in 2021[222]. - Operating income for 2022 was $246 million, significantly lower than$ 1,680 million in 2021[222]. - Net loss for 2022 was $(19) million, compared to a net income of$ 938 million in 2021[222]. - Basic and diluted net loss per share for 2022 was $(0.15), a decline from$ 6.41 and $6.32 per share in 2021 respectively[222]. - Net cash provided by operating activities in 2022 was$ 282 million, a significant decrease from $2,271 million in 2021[227]. - Total shareholders' equity at the end of 2022 was$ 3,763 million, down from $4,661 million in 2021[225]. Inventory and Merchandise - As of January 28, 2023, the company's merchandise inventories balance was$ 3.2 billion, an increase from $3.1 billion on January 29, 2022[210]. - Approximately 20% of the merchandise sold is sourced through a third-party purchasing agent, with the remainder from various domestic and international vendors[61]. - The company faces challenges in sourcing merchandise timely and cost-effectively, particularly for goods sourced outside the United States[61]. Debt and Financing - The company upsized its unsecured credit facility to a$ 1.5 billion senior secured, asset-based revolving credit facility in January 2023[82]. - During 2022, the company's credit ratings were reduced below investment grade, leading to increased interest rates on long-term debt[83]. - Long-term unsecured senior debt amounted to $1,637 million as of January 28, 2023, with an effective interest rate of 4.89%[266]. - The company was in compliance with all covenants of its various debt agreements as of January 28, 2023[269]. Legal and Regulatory - The company is actively monitoring legal and regulatory environments that may impact operations and financial performance[86]. - The company intends to vigorously defend against a class action lawsuit filed on September 2, 2022, alleging violations of the Securities and Exchange Act[307]. Marketing and Sales - Marketing costs for 2022 totaled$ 940 million, with net marketing costs amounting to $883 million, representing 4.9% of total revenue[259]. - The company recognized$ 158 million in net sales from gift cards redeemed during the current year, which were issued in prior years[254]. - The retail business is subject to seasonal influences, with sales and income typically higher during back-to-school and holiday seasons[38]. - Seasonal influences significantly impact the company's sales, with a major portion of sales occurring during the second half of the fiscal year[73]. Shareholder Returns - Dividends paid per common share increased to $2.00 in 2022 from$ 1.00 in 2021[225]. - The company repurchased a total of 17.9 million shares of common stock at an average purchase price of approximately $28 per share as part of a$ 3.0 billion share repurchase program[249][250]. Tax and Deferred Tax - Gross unrecognized tax benefits amounted to $219 million as of January 28, 2023[214]. - The effective tax rate for 2022 was 68.1%, significantly higher than 23.1% in 2021 due to favorable results from uncertain tax positions[288]. - The net deferred tax liability decreased to$ 83 million in 2023 from $167 million in 2022, a reduction of 50%[286]. - The company had net unrecognized tax benefits of$ 202 million as of January 28, 2023, down from $256 million as of January 29, 2022[291]. Leadership Changes - The company appointed Thomas Kingsbury as Chief Executive Officer effective February 2, 2023[309].