Kohl’s Corporation reported Thursday that fiscal second quarter comparable store sales inched up just 0.1 percent for the 13-week period ended August 1, compared to a decline of 1.3 percent in the year-ago quarter. Reported net income fell 44 percent to $130 million, or 66 cents per diluted share, compared to $232 million, or $1.13 per diluted share, in fiscal Q2 2014. Net sames grew 0.6 percent to $4.27 billion and gross margins were flattish for the period at 38.9 percent of sales.

Kevin Mansell, Kohl's chairman, CEO and president, said, “Our sales results were below our plan as the shift of sales in tax-free states from July into August was larger than anticipated. Our expenses were well managed for the season. Our inventory receipts are well-positioned for the back-to-school and fall seasons.”

On August 11, 2015, Kohl's Board of Directors declared a quarterly cash dividend on the company's common stock of 45 cents per share. The dividend is payable September 23, 2015 to shareholders of record at the close of business on September 9, 2015.

Store Update
Kohl’s ended the quarter with 1,164 stores in 49 states, compared with 1,160 stores at the same time last year.

Loss on Extinguishment of Debt and Guidance Update

As previously reported, the company completed a cash tender offer for $767 million of debt. In addition, the company exercised its right to redeem $318 million of notes due in 2017 which were not initially tendered. The company also issued $1.1 billion in new notes. In conjunction with the refinancing, the company incurred a loss of approximately $170 million. $131 million was recognized in the second quarter of fiscal 2015 and the company expects an additional $39 million to be recognized in the third quarter of fiscal 2015 when the remaining 2017 notes are settled.

Absent the effect of the loss on the extinguishment of debt, KSS now expects its fiscal 2015 earnings per diluted share to be at the low range of its previous guidance of $4.40 to $4.60.