Kohl’s shared the company’s new strategic framework with the investment community, including new initiatives to position the company for long-term success. As part of its strategy, Kohl’s has set a new vision: to be the most trusted retailer of choice for the active and casual lifestyle.
The strategy, informed by customer insights, is designed to drive top-line growth and expand operating margin, supported by capital management and organizational culture to create long-term shareholder value.
“Kohl’s is uniquely positioned to be the retailer of choice for the active and casual lifestyle for the entire family with our accessible and aspirational brand portfolio, seamless omnichannel experience, and industry-leading loyalty program. We are leaning into categories where we have demonstrated momentum and will drive more growth opportunities into the future. The recent environment has accelerated our path forward and presented a unique opportunity to capture market share from retail industry disruption,” said Michelle Gass, Kohl’s chief executive officer. “We have shown our ability to navigate through the COVID-19 crisis by focusing on customer and associate safety, operational efficiency and ensuring our financial resiliency. We are well-positioned to both continue to manage our business through the pandemic and to take full advantage of a brighter future ahead.”
Kohl’s will focus on three key areas to drive top-line growth:
- Be the destination for active, casual and beauty for the entire family. This includes expanding in Active and Outdoor categories, reigniting growth in the Women’s category, building a sizable Beauty business and driving category productivity and inventory turn. The company also seeks to capture market share from retail industry disruption.
- Lead with loyalty and value through its rewards program including Kohl’s Cash, Kohl’s Rewards and Kohl’s Charge Card. This includes driving productivity through engagement with customers and delivering personalized experiences.
- Offer a differentiated omnichannel experience that is easy and inviting, no matter how customers want to shop. This includes leveraging Kohl’s store base in an evolving landscape, modernizing the store experience, digital growth, and further enhancing omnichannel capabilities.
The company is also focused on increasing profitability with the goal of expanding its operating margin to 7 percent to 8 percent.
- Efforts include an end-to-end supply chain transformation, sourcing optimization and SG&A expense efficiency across store labor, marketing and technology.
- Leveraging its core operations, which resulted in more than $250 million in cost savings from 2017 through 2019 and, in 2020, savings of more than $100 million on an annualized basis.
Kohl’s said it’s committed to balance sheet management with a long-term objective of sustaining its investment-grade rating, a status it has held for more than two decades. The company is also committed to a long-term capital return program following a long history of returning significant capital to shareholders.
The company’s strategic efforts are supported by its organizational focus. “Kohl’s will continue to foster a workplace culture of agility, accountability and experimentation, while also further amplifying its efforts on diversity and inclusion, and environmental, social and corporate governance (ESG) stewardship”.
The full Investor Deck presentation is available here.
Photo courtesy Kohl’s