Kohl’s today shared the company’s new strategic framework with the investment community, including new initiatives to position the company for long-term success. As part of its strategy, Kohl’s has set a new vision: to be the most trusted retailer of choice for the active and casual lifestyle.
The strategy, informed by customer insights, is designed to drive top-line growth and expand operating margin, supported by disciplined capital management and an agile organizational culture, to create long-term shareholder value.
“Kohl’s is uniquely positioned to be the retailer of choice for the active and casual lifestyle for the entire family with our accessible and aspirational brand portfolio, seamless omnichannel experience, and industry-leading loyalty program. We are leaning into categories where we have demonstrated momentum and will drive more growth opportunities into the future. The recent environment has accelerated our path forward and presented a unique opportunity to capture market share from retail industry disruption,” said Michelle Gass, Kohl’s chief executive officer. “We have shown our ability to navigate through the COVID-19 crisis by focusing on customer and associate safety, operational efficiency and ensuring our financial resiliency. We are well positioned to both continue to manage our business through the pandemic and to take full advantage of a brighter future ahead."
The new strategy will build on Kohl's strong foundation of 65 million customers, industry-leading loyalty and charge card programs, more than 1,160 stores, and large and growing digital business.
To accomplish the vision to be the most trusted retailer of choice for the active and casual lifestyle, Kohl's will focus on three key areas that will drive top-line growth.
Be the destination for active, casual and beauty for the entire family from the most trusted brands, always delivering quality and discovery. This includes expanding in Active and Outdoor categories, reigniting growth in the Women’s category, building a sizable Beauty business, and driving category productivity and inventory turn. The company also seeks to capture market share from retail industry disruption.
Lead with loyalty and value through a best-in-class rewards program, including Kohl’s Cash, Kohl’s Rewards and Kohl’s Charge Card. This includes driving productivity through deeper engagement with customers and continuing to deliver personalized experiences.
Offer a differentiated omnichannel experience that is easy and inviting, no matter how customers want to shop. This includes leveraging Kohl’s healthy store base in an evolving landscape, modernizing the store experience, continuing digital growth, and further enhancing omnichannel capabilities.
The company is also focused on increasing profitability with a goal of expanding its operating margin to 7% to 8%.
Efforts include an end-to-end supply chain transformation, sourcing optimization and SG&A expense efficiency across store labor, marketing and technology.
In addition, the company will leverage its core discipline of operational excellence, which resulted in more than $250 million of cost savings from 2017 through 2019 and more recently, in 2020, expense savings of more than $100 million on an annualized basis.
Kohl’s has a track record of disciplined financial management and this will continue to be an important focus. The company is committed to prudent balance sheet management with a long-term objective of sustaining its investment grade rating, a status it has held for more than two decades. The company is also committed to a long-term capital return program and this follows a long history of returning significant capital to shareholders.
The company’s strategic efforts are supported by its strong organizational focus. Kohl’s will continue to foster a workplace culture of agility, accountability and experimentation, while also further amplifying its efforts on diversity and inclusion, and environmental, social and corporate governance (ESG) stewardship.
The full Investor Deck presentation is available here.
Cautionary Statement Regarding Forward-Looking Information
This article 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, and in Item 1A of Part II in the Company's Quarterly Report on Form 10-Q for the quarter ended May 2, 2020, 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.