MENOMONEE FALLS, Wis.--(BUSINESS WIRE)—August 23, 2023-- Kohl’s Corporation (NYSE:KSS) today reported results for the second quarter ended July 29, 2023.

Net sales decreased 4.8% and comparable sales decreased 5.0%
Diluted earnings per share of $0.52
Inventory declined 14%
Reaffirms 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 second quarter earnings were in line with our expectations. We maintained strong sales momentum in Sephora at Kohl’s, reduced inventory by 14%, and managed expenses tightly. Further, solid cash flow generation allowed us to reduce our borrowings in the period.”

“Many of our strategic efforts are just underway, which we expect will contribute incrementally in the back half of the year, and even more so in 2024 and beyond. We have enhanced the store experience and recently opened an additional 200 Sephora at Kohl’s shops, and are taking steps to further optimize our assortment and simplify our value strategies. Looking ahead, we are reaffirming our 2023 guidance and remain confident in our longer-term opportunity. I want to thank the entire Kohl’s team for their efforts to support and drive improved Kohl’s performance,” Kingsbury continued.

Second Quarter 2023 Results
Comparisons refer to the 13-week period ended July 29, 2023 versus the 13-week period ended July 30, 2022

Net sales decreased 4.8% year-over-year, to $3.7 billion, with comparable sales down 5.0%.

Gross margin as a percentage of net sales was 39.0%, a decrease of 61 basis points.

Selling, general & administrative (SG&A) expenses increased 1.6% year-over-year, to $1.3 billion. As a percentage of total revenue, SG&A expenses were 33.5%, an increase of 208 basis points year-over-year.

Operating income was $163 million compared to $266 million in the prior year. As a percentage of total revenue, operating income was 4.2%, a decrease of 233 basis points year-over-year.

Net income was $58 million, or $0.52 per diluted share. This compares to net income of $143 million, or $1.11 per diluted share in the prior year.

Inventory was $3.5 billion, a decrease of 14% year-over-year.

Operating cash flow was $430 million.

Six Months Fiscal Year 2023 Results
Comparisons refer to the 26-week period ended July 29, 2023 versus the 26-week period ended July 30, 2022

Net sales decreased 4.1% year-over-year, to $7.0 billion, with comparable sales down 4.7%.

Gross margin as a percentage of net sales was 39.0%, a decrease of 1 basis point.

Selling, general & administrative (SG&A) expenses decreased 1.3% year-over-year, to $2.5 billion. As a percentage of total revenue, SG&A expenses were 34.1%, an increase of 103 basis points year-over-year.

Operating income was $261 million compared to $348 million in the prior year. As a percentage of total revenue, operating income was 3.5%, a decrease of 96 basis points year-over-year.

Net income was $72 million, or $0.65 per diluted share. This compares to net income of $157 million, or $1.22 per diluted share in the prior year.

Operating cash flow was $228 million.

2023 Financial and Capital Allocation Outlook
For the full year 2023, the Company reaffirms 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 August 8, 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 September 20, 2023 to shareholders of record at the close of business on September 6, 2023.

Second Quarter 2023 Earnings Conference Call
Kohl’s will host its quarterly earnings conference call at 9:00 am ET on August 23, 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 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 serves millions of families in our more than 1,100 stores in 49 states, online at Kohls.com, and through our Kohl's App. 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.