MENOMONEE FALLS, Wis.--(BUSINESS WIRE)—November 21, 2023-- Kohl’s Corporation (NYSE:KSS) today reported results for the third quarter ended October 28, 2023.

Net sales decreased 5.2% and comparable sales decreased 5.5%
Diluted earnings per share of $0.53
Inventory declined 13%
Updates full year 2023 diluted earnings per share guidance to $2.30 to $2.70
Remains committed to strengthening balance sheet and to maintaining current dividend

Tom Kingsbury, Kohl’s chief executive officer, said “Kohl’s third quarter earnings reflect strong gross margin and expense management as well as additional progress against our strategic priorities. I am pleased with our store performance driven by strong growth in Sephora and the newness in our home and gifting initiatives. This reinforces our actions are working and resonating with our customers. In addition, we drove a 13% reduction in inventory as we benefited from our new disciplines.”

“Our strategies to reposition Kohl’s for improved sales and earnings performance remain in the early stages. The work we have done in 2023 will continue to build momentum and set us up to be successful in 2024. I continue to be impressed with the entire Kohl’s team for their hard work and agility in executing against our strategic priorities in 2023,” Kingsbury continued.

Third Quarter 2023 Results

Comparisons refer to the 13-week period ended October 28, 2023 versus the 13-week period ended October 29, 2022

Net sales decreased 5.2% year-over-year, to $3.8 billion, with comparable sales down 5.5%.
Gross margin as a percentage of net sales was 38.9%, an increase of 158 basis points.
Selling, general & administrative (SG&A) expenses increased 1.9% year-over-year, to $1.4 billion. As a percentage of total revenue, SG&A expenses were 33.5%, an increase of 235 basis points year-over-year.
Operating income was $157 million compared to $200 million in the prior year. As a percentage of total revenue, operating income was 3.9%, a decrease of 82 basis points year-over-year.
Net income was $59 million, or $0.53 per diluted share. This compares to net income of $97 million, or $0.82 per diluted share in the prior year.
Inventory was $4.2 billion, a decrease of 13% year-over-year.
Operating cash flow was $151 million.

Nine Months Fiscal Year 2023 Results

Comparisons refer to the 39-week period ended October 28, 2023 versus the 39-week period ended October 29, 2022

Net sales decreased 4.5% year-over-year, to $10.9 billion, with comparable sales down 5.0%.
Gross margin as a percentage of net sales was 39.0%, an increase of 56 basis points.
Selling, general & administrative (SG&A) expenses decreased 0.2% year-over-year, to $3.9 billion. As a percentage of total revenue, SG&A expenses were 33.9%, an increase of 150 basis points year-over-year.
Operating income was $418 million compared to $548 million in the prior year. As a percentage of total revenue, operating income was 3.6%, a decrease of 91 basis points year-over-year.
Net income was $131 million, or $1.18 per diluted share. This compares to net income of $254 million, or $2.02 per diluted share in the prior year.
Operating cash flow was $379 million.

2023 Financial and Capital Allocation Outlook

For the full year 2023, the Company updates its financial outlook and currently expects the following:

Net sales: A decrease of (2.8%) to (4%), includes the impact of the 53rd week which is worth approximately 1% year-over-year. This compares to the Company’s prior guidance of a decrease of (2%) to (4%).
Operating margin: Approximately 4.0%, which is consistent with the Company’s prior guidance.
Diluted earnings per share: In the range of $2.30 to $2.70, excluding any non-recurring charges. This compares to the Company’s prior guidance range of $2.10 to $2.70.
Capital Expenditures: Towards the lower end of $600 million to $650 million, including expansion of its Sephora partnership and store refresh activity.
Dividend: On November 7, 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 December 20, 2023 to shareholders of record at the close of business on December 6, 2023.

Third Quarter 2023 Earnings Conference Call

Kohl’s will host its quarterly earnings conference call at 9:00 am ET on November 21, 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. Forward-looking statements include the information under “2023 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 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.