MENOMONEE FALLS, Wis.--(BUSINESS WIRE)—November 26, 2024-- Kohl’s Corporation (NYSE:KSS) today reported results for the third quarter ended November 2, 2024.

Net sales decreased 8.8% and comparable sales decreased 9.3%
Diluted earnings per share of $0.20
Updates full year 2024 financial outlook
Kohl’s Board announces CEO transition process

Tom Kingsbury, Kohl’s chief executive officer, said “Our third quarter results did not meet our expectations as sales remained soft in our apparel and footwear businesses. Although we had a strong collective performance across our key growth areas, including Sephora, home decor, gifting, and impulse, and also benefited from the opening of Babies “R” Us shops in 200 of our stores, these were unable to offset the declines in our core business. Importantly, we delivered gross margin expansion and managed expenses tightly in the quarter.”

“We are not satisfied with our performance in 2024 and are taking aggressive action to reverse the sales declines. We must execute at a higher level and ensure we are putting the customer first in everything we do. We are approaching our financial outlook for the year more conservatively given the third quarter underperformance and our expectation for a highly competitive holiday season,” Kingsbury continued.

CEO Transition Process

As announced on November 25, 2024, Chief Executive Officer Tom Kingsbury plans to step down as CEO, effective January 15, 2025. He will stay on in an advisory role to the new CEO and retain his position on Kohl's Board of Directors (the "Board") through his retirement in May 2025. The Board appointed retail veteran Ashley Buchanan as CEO and Board member, effective January 15, 2025.

Third Quarter 2024 Results

Comparisons refer to the 13-week period ended November 2, 2024 versus the 13-week period ended October 28, 2023

Net sales decreased 8.8% year-over-year, to $3.5 billion, with comparable sales down 9.3%.
Gross margin as a percentage of net sales was 39.1%, an increase of 20 basis points.
Selling, general & administrative (SG&A) expenses decreased 5.1% year-over-year, to $1.3 billion. As a percentage of total revenue, SG&A expenses were 34.8%, an increase of 125 basis points year-over-year.
Operating income was $98 million compared to $157 million in the prior year. As a percentage of total revenue, operating income was 2.7%, a decrease of 120 basis points year-over-year.
Net income was $22 million, or $0.20 per diluted share. This compares to net income of $59 million, or $0.53 per diluted share in the prior year.
Inventory was $4.1 billion, a decrease of 3% year-over-year.
Operating cash flow was a use of $195 million.

Nine Months Fiscal Year 2024 Results

Comparisons refer to the 39-week period ended November 2, 2024 versus the 39-week period ended October 28, 2023

Net sales decreased 6.1% year-over-year, to $10.2 billion, with comparable sales down 6.4%.
Gross margin as a percentage of net sales was 39.4%, an increase of 42 basis points.
Selling, general & administrative (SG&A) expenses decreased 3.4% year-over-year, to $3.8 billion. As a percentage of total revenue, SG&A expenses were 34.8%, an increase of 95 basis points year-over-year.
Operating income was $307 million compared to $418 million in the prior year. As a percentage of total revenue, operating income was 2.8%, a decrease of 79 basis points year-over-year.
Net income was $61 million, or $0.55 per diluted share. This compares to net income of $131 million, or $1.18 per diluted share in the prior year.
Operating cash flow was $52 million.
Long-term debt was reduced by $113 million through the redemption of the remaining 9.50% notes due May 15, 2025.

Updated 2024 Financial and Capital Allocation Outlook

For the full year 2024, which has 52 weeks compared to 53 weeks in full year 2023, the Company currently expects the following:

Net sales: A decrease of (7%) to a decrease of (8%)

Comparable sales: A decrease of (6%) to a decrease of (7%)

Operating margin: In the range of 3.0% to 3.2%

Diluted EPS: In the range of $1.20 to $1.50

Capital Expenditures: Approximately $500 million, including expansion of Sephora partnership and other store-related investments

Dividend: On November 13, 2024, 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 December 24, 2024 to shareholders of record at the close of business on December 11, 2024.

Third Quarter 2024 Earnings Conference Call

Kohl’s will host its quarterly earnings conference call at 9:00 am ET on November 26, 2024. 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. Forward-looking statements include the information under “Updated 2024 Financial and Capital Allocation Outlook.” 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 the Company undertakes no obligation to update them.

About Kohl's

Kohl’s (NYSE: KSS) is a leading omnichannel retailer built on a foundation that combines great brands, incredible value and convenience for our customers. Kohl’s is uniquely positioned to deliver against its long-term strategy and its purpose to take care of families’ realest moments. Kohl's serves millions of families in its more than 1,100 stores in 49 states, online at Kohls.com, and through the Kohl's App. With a large national footprint, Kohl’s is committed to making a positive impact in the communities it serves. 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.

Contacts

Investor Relations:

Jill Timm, (262) 703-2203, jill.timm@kohls.com

Media:

Jen Johnson, (262) 703-5241, jen.johnson@kohls.com