Kohl’s Corporation (NYSE:KSS) today reported results for the first quarter ended April 29, 2023.

• Net sales decreased 3.3% and comparable sales decreased 4.3%
• Gross margin increased 67 basis points
• Diluted earnings per share of $0.13
• Inventory declined 6%
• Affirms full year 2023 financial outlook
• Remains committed to strengthening balance sheet and to maintaining current dividend

Tom Kingsbury, Kohl’s chief executive officer, said “Our first quarter results were in line with our expectations and represented a first step as we work to drive sales and earnings performance over the long-term. We delivered margin expansion, as well as a 6% reduction in inventory. In addition, our stores business achieved productivity gains and Sephora at Kohl’s continued its sales momentum.”

“We are making progress against each of our key 2023 priorities, enhancing our customer experience, simplifying our value strategies, managing inventory and expenses with discipline, and strengthening our balance sheet. I would like to thank the entire Kohl’s team for driving against these priorities with a clear focus and strong determination. While there is still work to be done and the macroeconomic environment remains challenging, we are affirming our 2023 guidance and continue to have conviction in Kohl’s longer term opportunity,” Kingsbury continued.

First Quarter 2023 Results

Comparisons refer to the 13-week period ended April 29, 2023 versus the 13-week period ended April 30, 2022

• Net sales decreased 3.3% year-over-year, to $3.4 billion, with comparable sales down 4.3%.
• Gross margin as a percentage of net sales was 39.0%, an increase of 67 basis points.
• Selling, general & administrative (SG&A) expenses decreased 4.2% year-over-year, to $1.2 billion. As a percentage of total revenue, SG&A expenses were 34.7%, a decrease of 13 basis points year-over-year.
• Operating income was $98 million compared to $82 million in the prior year. As a percentage of total revenue, operating income was 2.8%, an increase of 55 basis points year-over-year.
• Net income was $14 million, or $0.13 per share. This compares to net income of $14 million, or $0.11 per share in the prior year.
• Inventory was $3.5 billion, a decrease of 6% year-over-year.
• Operating cash flow was a use of ($202) million.

2023 Financial and Capital Allocation Outlook

For the full year 2023, the Company affirms its financial outlook and currently expects the following:

• Net sales: A decrease of (2%) to (4%), includes the impact of the 53rd week which is worth approximately 1% year-over-year.
• Operating margin: Approximately 4.0%.
• Diluted earnings per share: In the range of $2.10 to $2.70, excluding any non-recurring charges.
• Capital Expenditures: $600 million to $650 million, including expansion of its Sephora partnership and store refresh activity.
• Dividend: On May 10, 2023, Kohl’s Board of Directors declared a quarterly cash dividend on the Company’s common stock of $0.50 per share. The dividend is payable June 21, 2023 to shareholders of record at the close of business on June 7, 2023.
• Debt Reduction: The Company retired $164 million of bonds that matured in February 2023, and expects to retire $111 million of bonds maturing in December 2023.

First Quarter 2023 Earnings Conference Call

Kohl’s will host its quarterly earnings conference call at 9:00 am ET on May 24, 2023. A webcast of the conference call and the related presentation materials will be available via the Company's web site at investors.kohls.com, both live and after the call.

Cautionary Statement Regarding Forward-Looking Information

This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. The Company intends forward-looking terminology such as “believes,” “expects,” “may,” “will,” “should,” “anticipates,” “plans,” or similar expressions to identify forward-looking statements. Such statements are subject to certain risks and uncertainties, which could cause the Company's actual results to differ materially from those anticipated by the forward-looking statements. These risks and uncertainties include, but are not limited to, risks described more fully in Item 1A in the Company’s Annual Report on Form 10-K, which are expressly incorporated herein by reference, and other factors as may periodically be described in the Company’s filings with the SEC. Forward-looking statements relate to the date initially made, and Kohl’s undertakes no obligation to update them.

About Kohl's

Kohl’s (NYSE: KSS) is a leading omnichannel retailer. With more than 1,100 stores in 49 states and the online convenience of Kohls.com and the Kohl's App, Kohl's offers amazing national and exclusive brands at incredible savings for families nationwide. Kohl’s is committed to progress in its diversity and inclusion pledges, and the company's environmental, social, and corporate governance (ESG) stewardship. For a list of store locations or to shop online, visit Kohls.com. For more information about Kohl’s impact in the community or how to join our winning team, visit Corporate.Kohls.com.

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