Kohl's Corporation reported that net sales for the fiscal second quarter ended August 1 were $3.8 billion, an increase of 2.2% for the quarter. Comparable store sales for the quarter decreased 2.3%. Net income for the quarter were $229 million, or 75 cents per diluted share, compared with $236 million, or 77 cents per diluted share, in the year-ago period.
For the six months ended August 1, 2009, net income decreased 5.4% to $368 million, or $1.20 per diluted share, compared to $389 million, or $1.26 per diluted share, for the six months ended August 2, 2008. Net sales increased 1.3% to $7.4 billion from $7.3 billion a year ago. Comparable store sales decreased 3.2% for the same period.
Kevin Mansell, Kohl's president and chief executive officer, said, “Sales for the first half of 2009 exceeded our plans and indicated market share gains across most merchandise areas and regions. In addition, we continue to experience improvements in inventory management and increased penetration in “Only at Kohl's” brands that have led to improved gross margins. Our expense performance matched our expectations despite our outperformance on the sales line. We will focus on providing value for our customer as they continue to be conservative in their spending in this environment.”
Mansell added, “I am very proud of our 121,000 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.”
During the first six months of 2009, Kohl's successfully opened 19 stores. The company ended the quarter with 1,022 stores in 49 states, compared with 957 stores in 47 states at the same time last year. The company expects to open an additional 37 stores later this year for a total of 56 stores in fiscal 2009. By the end of August, the company will have completed 51 store remodels, compared to 36 stores last year.
For the third quarter, the company expects total sales to range between negative 1% and positive 1%; comparable store sales to range between negative 5% and negative 3%; and gross margin as a% of sales to increase 10 to 20 basis points over last year. The company expects selling, general and administrative expenses to increase between 3 and 4%. This would result in earnings per diluted share of 40 cents to 44 cents for the third quarter.
For the fourth quarter, the company expects total sales to range between negative 1% and positive 1%; comparable store sales to range between negative 5% and negative 3%; and gross margin as a% of sales to increase 20 to 30 basis points over last year. The company expects selling, general and administrative expenses to increase between 3 and 4%. This would result in earnings per diluted share of 99 cents to $1.06 for the fourth quarter.
The companys updated guidance for the fiscal 2009 is $2.59 to $2.70 per diluted share.
Condensed Consolidated Statements of Income
(In Millions, except per share data)
Subject to Reclassification
|(13 Weeks) Ended|
|% to||% to|
|August 1,||Net||August 2,||Net|
|Net sales||$ 3,806||$ 3,725|
|Cost of merchandise sold||2,286||60.0||%||2,250||60.4||%|
|Selling, general, and administrative||966||25.4||%||930||25.0||%|
|Depreciation and amortization||144||3.8||%||133||3.6||%|
|Interest expense, net||31||0.8||%||26||0.7||%|
|Income before income taxes||368||9.7||%||380||10.2||%|
|Provision for income taxes||139||3.6||%||144||3.9||%|
|Net income||$ 229||6.1||%||236||6.3||%|
|Basic net income per share||$ 0.76||$ 0.77|
|Average number of shares||305||306|
|Diluted net income per share||$ 0.75||$ 0.77|
|Average number of shares||306||307|