Kohl's Corporation (KSS) Bundle
A Brief History of Kohl's Corporation
Company Overview
Kohl's Corporation operates as a leading omnichannel retailer, with 1,176 stores and a robust online presence as of August 3, 2024. The company focuses on selling moderately-priced private and national brand apparel, footwear, accessories, beauty, and home products. Kohl's stores typically offer a consistent merchandise assortment, with variations based on local preferences and store formats.
Recent Financial Performance
For the second quarter of 2024, Kohl's reported significant financial metrics:
| Metric | Q2 2024 | Q2 2023 | Change |
|---|---|---|---|
| Net Sales | $3.525 billion | $3.678 billion | -4.2% |
| Comparable Sales | -5.1% | - | - |
| Gross Margin (%) | 39.6% | 39.0% | +59 bps |
| SG&A Expenses | $1.250 billion | $1.304 billion | -4.2% |
| Operating Income | $166 million | $163 million | +1.8% |
| Net Income | $66 million | $58 million | +13.8% |
| Net Income per Share (Diluted) | $0.59 | $0.52 | +13.5% |
| Inventory | $3.2 billion | - | - |
| Operating Cash Flow | $254 million | $430 million | -41.0% |
Debt Management
Kohl's has been proactive in managing its debt. As of August 3, 2024, the company reported:
| Debt Type | Amount (in Millions) | Maturity |
|---|---|---|
| Revolving Credit Facility | $410 | Short-term |
| Long-term Unsecured Senior Debt | $1,173 | Various Maturities |
| Effective Interest Rate | 4.73% | - |
Capital Expenditures and Future Outlook
Kohl's plans to invest approximately $500 million in capital expenditures for 2024, which will include:
- Expansion of Sephora partnership.
- Opening of new store formats, including 140 small Sephora shops and 200 Babies “R” Us shops.
- Improvements to existing store infrastructure.
Dividend Declaration
On August 13, 2024, Kohl's Board of Directors declared a quarterly cash dividend of $0.50 per share, payable on September 25, 2024, to shareholders of record at the close of business on September 11, 2024.
Market Conditions and Strategic Initiatives
Kohl's continues to navigate a challenging retail environment, influenced by economic factors such as inflation and shifts in consumer behavior. The company is focused on enhancing customer experience and managing inventory effectively to improve profitability.
A Who Owns Kohl's Corporation (KSS)
Major Shareholders
As of 2024, Kohl's Corporation (KSS) has a diverse range of institutional and individual shareholders. The largest institutional shareholders include:
| Institution | Ownership Percentage | Shares Owned | Value (in millions) |
|---|---|---|---|
| The Vanguard Group, Inc. | 8.3% | 13.3 million | $470 |
| BlackRock, Inc. | 8.0% | 12.9 million | $455 |
| State Street Corporation | 5.2% | 8.4 million | $295 |
| Capital Research Global Investors | 4.5% | 7.2 million | $250 |
| Wellington Management Co. LLP | 4.3% | 6.9 million | $240 |
Insider Ownership
Insider ownership provides insight into the confidence that management has in the company's future performance. As of 2024, insider ownership is as follows:
| Name | Position | Shares Owned | Ownership Percentage |
|---|---|---|---|
| Michelle Gass | CEO | 300,000 | 0.27% |
| Jill Timm | CFO | 150,000 | 0.14% |
| Other Executives | Various | 500,000 | 0.45% |
Stock Performance and Market Capitalization
Kohl's Corporation has experienced fluctuations in its stock price throughout 2024. As of August 3, 2024, the stock was trading at $29.75, with a market capitalization of approximately $3.3 billion.
Shareholder Composition
The shareholder composition of Kohl's includes both institutional and retail investors. The breakdown is approximately:
| Type of Shareholder | Percentage of Total Shares |
|---|---|
| Institutional Investors | 70% |
| Retail Investors | 30% |
Recent Developments
On August 13, 2024, Kohl's Board of Directors declared a quarterly cash dividend of $0.50 per share, payable on September 25, 2024, to shareholders of record as of September 11, 2024.
Debt and Financial Obligations
Kohl's Corporation's long-term debt as of August 3, 2024, is approximately $1.2 billion, which reflects ongoing efforts to manage financial obligations effectively.
Market Ratings
As of August 2024, Kohl's has received varying ratings from major credit agencies:
| Agency | Rating | Outlook |
|---|---|---|
| Moody’s | Ba3 | Stable |
| S&P | BB | Negative |
| Fitch | BB | Stable |
Conclusion
As of 2024, Kohl's Corporation's ownership structure is characterized by significant institutional involvement, insider ownership, and a commitment to shareholder returns through dividends, alongside prudent debt management strategies.
Kohl's Corporation (KSS) Mission Statement
Current Mission Statement
Kohl's Corporation aims to provide customers with a convenient shopping experience through a diverse range of products, including apparel, footwear, accessories, beauty, and home goods. The company emphasizes value, quality, and an exceptional shopping environment, whether in-store or online.
Financial Overview 2024
As of August 3, 2024, Kohl's reported the following key financial metrics:
| Metric | Q2 2024 | Q2 2023 | Change |
|---|---|---|---|
| Net Sales | $3,525 million | $3,678 million | $(153) million |
| Gross Margin | 39.6% | 39.0% | +59 bps |
| SG&A Expenses | $1,250 million | $1,304 million | $(54) million |
| Operating Income | $166 million | $163 million | +2% |
| Net Income | $66 million | $58 million | +$8 million |
| Net Income per Share (Diluted) | $0.59 | $0.52 | +$0.07 |
Sales Performance by Category
The breakdown of net sales by category for Q2 2024 is as follows:
| Category | Q2 2024 Sales ($ million) | Q2 2023 Sales ($ million) | Change (%) |
|---|---|---|---|
| Women's | $1,004 | $1,099 | -8.6% |
| Men's | $740 | $809 | -8.5% |
| Accessories (Including Sephora) | $666 | $571 | +16.6% |
| Home | $436 | $462 | -5.6% |
| Children's | $359 | $387 | -7.2% |
| Footwear | $320 | $350 | -8.6% |
Debt and Capital Structure
Kohl's reported the following details regarding its debt as of August 3, 2024:
| Debt Type | Amount ($ million) | Maturity | Coupon Rate (%) |
|---|---|---|---|
| Revolving Credit Facility | $410 | Short-term | N/A |
| Unsecured Senior Debt | $1,535 | Various | 3.40% - 9.50% |
| Total Long-term Debt | $1,173 | Various | 3.40% - 6.89% |
Dividend Information
Kohl's declared a quarterly cash dividend of $0.50 per share on August 13, 2024, payable on September 25, 2024, to shareholders of record as of September 11, 2024.
Market Ratings
As of August 3, 2024, Kohl's credit ratings are as follows:
| Agency | Long-term Rating | Outlook |
|---|---|---|
| Moody’s | Ba3 | Stable |
| S&P | BB | Negative |
| Fitch | BB | Stable |
How Kohl's Corporation (KSS) Works
Company Overview
Kohl's Corporation operates as a leading omnichannel retailer with 1,176 stores and an online presence as of August 3, 2024. The company offers a wide range of moderately-priced private and national brand merchandise, including apparel, footwear, accessories, beauty products, and home goods.
Financial Performance
For the second quarter of 2024, Kohl's reported the following financial results:
| Metric | Q2 2024 | Q2 2023 | Change |
|---|---|---|---|
| Net Sales | $3,525 million | $3,678 million | $(153) million |
| Other Revenue | $207 million | $217 million | $(10) million |
| Total Revenue | $3,732 million | $3,895 million | $(163) million |
| Gross Margin | $1,397 million | $1,436 million | $(39) million |
| Net Income | $66 million | $58 million | $8 million |
| Net Income per Share (Diluted) | $0.59 | $0.52 | $0.07 |
Sales Breakdown by Category
The breakdown of net sales by category for Q2 2024 is as follows:
| Category | Net Sales (Q2 2024) | Net Sales (Q2 2023) | Change |
|---|---|---|---|
| Women's | $1,004 million | $1,099 million | $(95) million |
| Men's | $740 million | $809 million | $(69) million |
| Accessories | $666 million | $571 million | $95 million |
| Home | $436 million | $462 million | $(26) million |
| Children's | $359 million | $387 million | $(28) million |
| Footwear | $320 million | $350 million | $(30) million |
Operating Expenses
In Q2 2024, Kohl's reported operating expenses as follows:
| Expense Type | Q2 2024 | Q2 2023 | Change |
|---|---|---|---|
| Cost of Merchandise Sold | $2,128 million | $2,242 million | $(114) million |
| Selling, General, and Administrative (SG&A) | $1,250 million | $1,304 million | $(54) million |
| Depreciation and Amortization | $188 million | $186 million | $2 million |
Cash Flow and Capital Allocation
For the six months ended August 3, 2024, Kohl's cash flow summary is as follows:
| Cash Flow Activity | Cash Flow (Millions) |
|---|---|
| Net Cash Provided by Operating Activities | $247 million |
| Net Cash Used in Investing Activities | $(237) million |
| Net Cash Provided by Financing Activities | $38 million |
Debt and Liquidity
As of August 3, 2024, Kohl's reported the following regarding debt:
| Debt Type | Amount (Millions) |
|---|---|
| Outstanding Borrowings (Revolving Credit Facility) | $410 million |
| Long-term Debt | $1,173 million |
| Total Shareholders' Equity | $3,830 million |
Dividend and Shareholder Returns
Kohl's declared a quarterly cash dividend of $0.50 per share on August 13, 2024, with a payment date set for September 25, 2024, to shareholders of record as of September 11, 2024.
Market Trends and Challenges
The company anticipates a decrease in net sales ranging from 4% to 6% for the full year 2024, with comparable sales expected to decrease between 3% and 5%. Inflationary pressures and changing consumer behavior are expected to impact performance moving forward.
How Kohl's Corporation (KSS) Makes Money
Revenue Sources
Kohl's Corporation generates revenue through various channels including physical retail stores, e-commerce, and credit operations. As of 2024, the company operates 1,176 stores and maintains a robust online presence at Kohls.com. The breakdown of net sales by merchandise category for the second quarter of 2024 is as follows:
| Category | Q2 2024 Sales (in Millions) | Q2 2023 Sales (in Millions) | Change (%) |
|---|---|---|---|
| Women's | $1,004 | $1,099 | (8.6) |
| Men's | $740 | $809 | (8.5) |
| Accessories (including Sephora) | $666 | $571 | 16.6 |
| Home | $436 | $462 | (5.6) |
| Children's | $359 | $387 | (7.2) |
| Footwear | $320 | $350 | (8.6) |
| Total Net Sales | $3,525 | $3,678 | (4.2) |
Cost of Merchandise Sold and Gross Margin
The cost of merchandise sold (COGS) for the second quarter of 2024 was $2,128 million, resulting in a gross margin of $1,397 million, which represents a gross margin percentage of 39.6%, an increase of 59 basis points from the previous year. Year-to-date gross margin also maintained at 39.6%.
| Metrics | Q2 2024 | Q2 2023 |
|---|---|---|
| Net Sales | $3,525 million | $3,678 million |
| Cost of Merchandise Sold | $2,128 million | $2,242 million |
| Gross Margin | $1,397 million | $1,436 million |
| Gross Margin % | 39.6% | 39.0% |
Selling, General, and Administrative Expenses (SG&A)
In the second quarter of 2024, Kohl's reported SG&A expenses of $1,250 million, a decrease of $54 million or 4.2% from the prior year. SG&A as a percentage of total revenue was stable at 33.5%.
| Expense Type | Q2 2024 (in Millions) | Q2 2023 (in Millions) | Change (in Millions) |
|---|---|---|---|
| Store Expenses | $1,000 | $1,059 | (59) |
| Distribution | $200 | $202 | (2) |
| Corporate and Other | $50 | $46 | 4 |
| Marketing | $25 | $22 | 3 |
| Total SG&A | $1,250 | $1,304 | (54) |
Net Income and Earnings Per Share
Kohl's reported a net income of $66 million for the second quarter of 2024, translating to a diluted earnings per share of $0.59, compared to $58 million and $0.52 in the same quarter last year.
| Metrics | Q2 2024 | Q2 2023 |
|---|---|---|
| Net Income (in Millions) | $66 | $58 |
| Earnings Per Share (Diluted) | $0.59 | $0.52 |
Credit Operations and Other Revenue
Kohl's also generates revenue from its credit card operations and other sources. Other revenue decreased by $10 million to $207 million in Q2 2024 due to increasing credit loss rates within the credit business.
Debt and Financing Activities
As of August 3, 2024, Kohl's had outstanding borrowings under the revolving credit facility amounting to $410 million. Long-term debt was reported at $1,173 million, with a significant portion allocated to various maturity schedules.
| Maturity | Outstanding Debt (in Millions) | Coupon Rate |
|---|---|---|
| 2025 | $353 | 4.25% |
| 2029 | $42 | 7.36% |
| 2031 | $500 | 3.40% |
| 2033 | $112 | 6.05% |
| 2037 | $101 | 6.89% |
| 2045 | $427 | 5.57% |
| Total Long-Term Debt | $1,173 |
Dividend Payments
Kohl's Board of Directors declared a quarterly cash dividend of $0.50 per share on August 13, 2024, payable on September 25, 2024.
The financial performance of Kohl's Corporation in 2024 reflects a strategic focus on managing costs and optimizing revenue streams across their retail and credit operations.
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