Kohl's Corporation Reports Earnings of $0.63 Per Diluted Share for Third Quarter of Fiscal 2009

http://www.businesswire.com/news/home/20091112005145/en

MENOMONEE FALLS, Wis.--(Business Wire)--
Kohl`s Corporation (NYSE:KSS):

* Net Income Increases 20 percent for Third Quarter
* Management Raises Fiscal 2009 Sales and Earnings Guidance

Kohl`s Corporation (NYSE:KSS). Kohl`s Corporation today reported results for the
quarter and year-to-date periods ended October 31, 2009.

Kohl`s Corporation reported net income for the quarter ended October 31, 2009
increased 20 percent to $193 million, or $0.63 per diluted share, compared to
$160 million, or $0.52 per diluted share, a year ago. Net sales were $4.1
billion, an increase of 6.5 percent for the quarter. Comparable store sales for
the quarter increased 2.4 percent.

For the nine months ended October 31, 2009, net income was $560 million, or
$1.83 per diluted share, compared to $549 million, or $1.79 per diluted share,
for the nine months ended November 1, 2008. Net sales increased 3.1 percent to
$11.5 billion from $11.2 billion a year ago. Comparable store sales decreased
1.3 percent for the same period.

Kevin Mansell, Kohl`s chairman, president and chief executive officer, said, "We
were pleased with our sales performance in the third quarter as we achieved a
positive comparable sales increase in a very difficult environment. In addition,
we continue to experience improvement in inventory management and increased
penetration in "Only at Kohl`s" brands that have led to increased cash flow and
consistently improved gross margins. Our expense performance allowed us to enjoy
significant leverage on the increased sales. As we enter the fourth quarter, we
will continue to focus on providing value for our customers as we expect them to
continue to be conservative in their spending during this holiday season."

Mansell added, "I am very proud of our associates and the role they played in
these results and want to thank them for their hard work, loyalty and dedication
in delivering on our promise to `expect great things` from Kohl`s."

Expansion Update

During the first nine months of 2009, Kohl`s successfully opened 56 stores. The
Company ended the quarter with 1,059 stores in 49 states, compared with 1,004
stores in 48 states at the same time last year. The Company completed 51 store
remodels, compared to 36 stores last year.

Earnings Guidance

For the fourth quarter, the Company expects total sales to increase between 3
and 6 percent; comparable store sales to range between negative 1 and positive 2
percent; and gross margin as a percent of sales to increase 50 to 60 basis
points over last year. The Company expects selling, general and administrative
expenses to increase between 4 and 5 percent. This would result in earnings per
diluted share of $1.14 - $1.24 for the fourth quarter and $2.98 - $3.08 for
fiscal 2009.

Third Quarter 2009 Earnings Conference Call

Investors will have an opportunity to listen to the third quarter earnings
conference call at 8:30 AM EST on November 12 by dialing (706) 902-0486, using
Conference ID 37529228. A replay of the call will also be accessible beginning
at 9:20 AM EST on November 12, until midnight EST on December 12, 2009. To
listen to the replay, dial (706) 645-9291, and use Conference ID 37529228.

In addition, the call will be web cast live over the Internet through the
Company's web site located at
http://www.kohlscorporation.com/InvestorRelations/event-calendar.htm. To
participate in the conference, register at
http://phx.corporate-ir.net/phoenix.zhtml?p=irol-eventDetails&c=60706&eventID=2507481
at least ten minutes prior to the call to download and install any necessary
audio software. The web cast will be available for 30 days.

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 including guidance on the
Company`s targeted sales and earnings. Kohl's 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 Kohl's actual results to differ materially from those
anticipated by the forward-looking statements. These risks and uncertainties
include, but are not limited to, those described in Item 1A in Kohl`s Annual
Report on Form 10-K, which is expressly incorporated herein by reference, and
other factors as may periodically be described in Kohl's filings with the SEC.

About Kohl`s

Based in Menomonee Falls, Wis., Kohl`s (NYSE: KSS) is a family-focused,
value-oriented specialty department store offering moderately priced, exclusive
and national brand apparel, shoes, accessories, beauty and home products in an
exciting shopping environment. Kohl`s operates 1,059 stores in 49 states. A
company committed to the communities it serves, Kohl`s has raised more than $126
million for children`s initiatives nationwide through its Kohl`s Cares for Kids
philanthropic program, which operates under Kohl's Cares, LLC, a wholly-owned
subsidiary of Kohl's Department Stores, Inc. For a list of store locations and
information, or for the added convenience of shopping online, visit
www.kohls.com.

Kohl's Corporation
(In Millions, except per share data)
(Unaudited)
Subject to Reclassification

Three Months
(13 Weeks) Ended
% to % to
October 31, Net November 1, Net
2009 Sales 2008 Sales

Net sales $ 4,051 $ 3,804
Cost of merchandise sold 2,512 62.0 % 2,381 62.6 %

Gross margin 1,539 38.0 % 1,423 37.4 %

Operating expenses:
Selling, general, and administrative 1,027 25.4 % 982 25.8 %
Depreciation and amortization 150 3.7 % 135 3.6 %
Preopening expenses 23 0.5 % 21 0.5 %

Operating income 339 8.4 % 285 7.5 %

Interest expense, net 31 0.8 % 28 0.7 %

Income before income taxes 308 7.6 % 257 6.8 %
Provision for income taxes 115 2.8 % 97 2.6 %

Net income $ 193 4.8 % $ 160 4.2 %

Basic net income per share $ 0.63 $ 0.53
Average number of shares 305 305

Diluted net income per share $ 0.63 $ 0.52
Average number of shares 308 305

Nine Months
(39 Weeks) Ended
% to % to
October 31, Net November 1, Net
2009 Sales 2008 Sales

Net sales $ 11,496 $ 11,153
Cost of merchandise sold 7,068 61.5 % 6,920 62.0 %

Gross margin 4,428 38.5 % 4,233 38.0 %

Operating expenses:
Selling, general, and administrative 2,954 25.7 % 2,834 25.4 %
Depreciation and amortization 435 3.8 % 398 3.6 %
Preopening expenses 49 0.4 % 38 0.4 %

Operating income 990 8.6 % 963 8.6 %

Interest expense, net 93 0.8 % 81 0.7 %

Income before income taxes 897 7.8 % 882 7.9 %
Provision for income taxes 337 2.9 % 333 3.0 %

Net income $ 560 4.9 % $ 549 4.9 %

Basic net income per share $ 1.84 $ 1.79
Average number of shares 305 306

Diluted net income per share $ 1.83 $ 1.79
Average number of shares 306 307

Kohl's Corporation
Condensed Consolidated Balance Sheets
(In Millions)
(Unaudited)
Subject to Reclassification

October 31, November 1,
2009 2008

Assets
Current assets:
Cash $ 232 $ 243
Short-term investments 1,299 36
Merchandise inventories 3,807 3,712
Deferred income taxes 69 76
Other current assets 168 165

Total current assets 5,575 4,232

Property and equipment, net 7,082 6,991
Long-term investments 325 345
Favorable lease rights, net 198 199
Goodwill 9 9
Other assets 121 110

Total assets $ 13,310 $ 11,886

Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable $ 2,071 $ 1,644
Accrued liabilities 905 769
Income taxes payable 14 1
Short-term debt - 302
Current portion of capital leases 17 17

Total current liabilities 3,007 2,733

Long-term debt and capital leases 2,054 2,057
Deferred income taxes 390 314
Other long-term liabilities 464 387
Shareholders' equity 7,395 6,395

Total liabilities and shareholders' equity $ 13,310 $ 11,886

Kohl's Corporation
Condensed Consolidated Statements of Cash Flows
(In Millions)
(Unaudited)
Subject to Reclassification

Nine Months
(39 Weeks) Ended
October 31, November 1,
2009 2008

Operating activities
Net income $ 560 $ 549
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization,
including debt discount and deferred financing fees 436 399
Share-based compensation 45 39
Excess tax benefits from share-based compensation 3 -
Deferred income taxes 69 71
Other non-cash revenues and expenses 39 18
Changes in operating assets and liabilities:
Merchandise inventories (1,005 ) (854 )
Other current and long-term assets 2 (30 )
Accounts payable 1,190 811
Accrued and other long-term liabilities 115 (47 )
Income taxes (96 ) (128 )

Net cash provided by operating activities 1,358 828

Investing activities
Acquisition of property and equipment
and favorable lease rights (550 ) (843 )
Net purchases of short-term investments (790 ) (6 )
Purchases of long-term investments - (53 )
Sales of long-term investments 20 93
Other (1 ) 6

Net cash used in investing activities (1,321 ) (803 )

Financing activities
Net borrowings under credit facilities - 302
Capital lease payments (12 ) (9 )
Treasury stock purchases (1 ) (262 )
Excess tax benefits from share-based compensation (3 ) -
Proceeds from stock option exercises 44 6

Net cash provided by financing activities 28 37

Net increase in cash 65 62
Cash at beginning of period 167 181

Cash at end of period $ 232 $ 243

Kohl`s Corporation
Investor Relations:
Wes McDonald, Chief Financial Officer, (262) 703-1893
or
Media:
Vicki Shamion, Vice President - Public Relations, (262) 703-1464

Copyright Business Wire 2009