8-K
KOHLS Corp false 0000885639 0000885639 2020-05-19 2020-05-19

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): May 19, 2020

 

KOHL’S CORPORATION

(Exact name of registrant as specified in its charter)

 

Wisconsin

 

001-11084

 

39-1630919

(State or other jurisdiction

of incorporation)

 

(Commission

File Number)

 

(IRS Employer

Identification No.)

N56 W17000 Ridgewood Drive 

Menomonee Falls, Wisconsin 

 

53051

(Address of principal executive offices)

 

(Zip Code)

Registrant’s telephone number, including area code: (262) 703-7000

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

 

Trading

Symbol(s)

 

Name of each exchange

on which registered

Common Stock, $.01 par value

 

KSS

 

New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company  

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  

 

 


Item 2.02. Results of Operations and Financial Condition.

On May 19, 2020, Kohl’s Corporation issued a press release reporting its earnings for the quarter ended May 2, 2020. A copy of the press release is attached as Exhibit 99.1 and incorporated by reference herein.

Item 7.01. Regulation FD Disclosure.

See Item 2.02. As part of its press release reporting earnings for the quarter ended May 2, 2020, Kohl’s Corporation provided an update on actions taken in response to COVID-19, including the Company’s actions against its priorities at the onset of the COVID-19 pandemic and the health and safety protocols it has incorporated into stores that have begun to reopen following the Company’s previous announcement of nationwide store closures due to the pandemic.

The information in Items 2.02 and 7.01, including the exhibit attached hereto, is furnished solely pursuant to Items 2.02 and 7.01 of Form 8-K. Consequently, such information is not deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liabilities of that section. Further, the information in Items 2.02 and 7.01, including the exhibit, shall not be deemed to be incorporated by reference into the filings of the registrant under the Securities Act of 1933.

Cautionary Statement Regarding Forward-Looking Information and Non-GAAP Measures

This current report on Form 8-K 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 is 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 Kohl’s undertakes no obligation to update them.

In this press release and presentation materials, the Company provides information regarding adjusted net (loss) income and adjusted diluted (loss) earnings per share, which are not recognized terms under U.S. generally accepted accounting principles (“GAAP”) and do not purport to be alternatives to net income as a measure of operating performance. A reconciliation of adjusted net (loss) income and adjusted diluted (loss) earnings per share is provided in this press release and presentation materials. The Company believes that the use of these non-GAAP financial measures provides investors with enhanced visibility into its results with respect to the impact of certain costs. Because not all companies use identical calculations, these presentations may not be comparable to other similarly titled measures of other companies.

Item 9.01. Financial Statements and Exhibits.

Exhibit
No.

   

Description

         
 

99.1

   

Press Release dated May 19, 2020

         
 

99.2

   

Presentation Materials for May 19, 2020 Quarterly Earnings Conference Call

         
 

104

   

Cover Page Interactive Data File (embedded within the Inline XBRL document)


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated: May 19, 2020

 

 

KOHL’S CORPORATION

             

 

 

By:

 

/s/ Jason J. Kelroy

 

 

 

Jason J. Kelroy

 

 

 

Executive Vice President,

 

 

 

General Counsel and Secretary

EX-99.1

Exhibit 99.1

Kohl’s Corporation Reports Financial Results

 

   

Significantly increased financial flexibility during quarter, ending with $2.0 billion in cash

 

   

Swift and aggressive actions taken in response to COVID-19 resulted in positive operating cash flow

 

   

First quarter net sales decrease (43.5%)

 

   

First quarter diluted loss per share of ($3.50); adjusted diluted loss per share(2) of ($3.20)

MENOMONEE FALLS, Wis.—(BUSINESS WIRE)—May 19, 2020— Kohl’s Corporation (NYSE:KSS) today reported results for the quarter ended May 2, 2020.

 

     Three Months  

($ in millions, except per share data)

   2020     2019     Change  

Total revenue

   $ 2,428     $ 4,087       (40.6 )% 

Net sales(1)

     (43.5 )%      (3.3 )%   

Gross margin

     17.3     36.8     (1,950) bps  

Selling, general, and administrative expenses

   $ 1,066     $ 1,275       (16.4 )% 

Reported

      

Net (loss) income

   $ (541   $ 62       (973 )% 

Diluted (loss) earnings per share

   $ (3.50   $ 0.38       (1,021 )% 

Non-GAAP(2)

      

Adjusted net (loss) income

   $ (495   $ 98       (605 )% 

Adjusted diluted (loss) earnings per share

   $ (3.20   $ 0.61       (625 )% 

 

  (1)

Not reporting comparable sales due to store closures

  (2)

Excludes Impairments, store closing, and other costs

“We entered the year in a strong financial position and our business was tracking to our expectations prior to the onset of the crisis. We immediately responded with actions to protect the health and safety of our associates and customers and to preserve our financial position. I am incredibly proud of how our associates stepped up to face this unprecedented challenge with speed and agility. Our actions to manage cash outflow and increase liquidity have been instrumental in enhancing our position to navigate this crisis, and we believe our history of prudent capital management will continue to serve us well,” said Michelle Gass, Kohl’s chief executive officer.

“We have begun the rebuilding process, recently reopening about 50% of our stores across the country. In doing so, we have taken special care to equip our stores with the latest health and safety measures as we welcome back our associates and customers,” said Gass. “As we look ahead, we know this experience will have a lasting impact to customer behavior and the retail landscape, and we are evolving our strategies to ensure our relevance and to capture market share.”

Actions Taken In Response to COVID-19

As part of the COVID-19 response, the Company has taken the following actions to preserve financial liquidity and financial flexibility:

 

   

Managed inventory receipts meaningfully lower,

 

   

Significantly reduced expenses across the business inclusive of marketing, technology, operations and payroll,

 

   

Decreased planned capital expenditures by approximately $500 million,

 

   

Suspended share repurchase program,

 

   

Suspended regular quarterly cash dividend beginning in the second quarter of 2020,

 

   

Replaced and upsized revolver to $1.5 billion secured facility, and

 

   

Issued $600 million notes due 2025.

First Quarter 2020 Earnings Conference Call

Kohl’s will host its quarterly earnings conference call at 9:00 am ET on May 19, 2020. A webcast of the conference call and the related presentation materials will be available via the Company’s web site at http://corporate.kohls.com/investors/events-and-presentations, both live and after the call.

Cautionary Statement Regarding Forward-Looking Information and Non-GAAP Measures

This current report on Form 8-K 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 is 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 Kohl’s undertakes no obligation to update them.


In this press release, the Company provides information regarding adjusted net (loss) income and adjusted diluted (loss) earnings per share, which are not recognized terms under U.S. generally accepted accounting principles (“GAAP”) and do not purport to be alternatives to net income as a measure of operating performance. A reconciliation of adjusted net (loss) income and adjusted diluted (loss) earnings per share is provided in this release. The Company believes that the use of these non-GAAP financial measures provides investors with enhanced visibility into its results with respect to the impact of certain costs. Because not all companies use identical calculations, these presentations may not be comparable to other similarly titled measures of other companies.

About Kohl’s

Kohl’s (NYSE: KSS) is a leading omnichannel retailer with more than 1,100 stores in 49 states. With a commitment to inspiring and empowering families to lead fulfilled lives, Kohl’s offers amazing national and exclusive brands, incredible savings and an easy shopping experience in our stores, online at Kohls.com and on Kohl’s mobile app. Since its founding, Kohl’s has given more than $750 million to support communities nationwide, with a focus on family health and wellness. 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 or follow @KohlsNews on Twitter.

Contacts

Investor Relations:

Mark Rupe, (262) 703-1266, mark.rupe@kohls.com

Media:

Jen Johnson, (262) 703-5241, jen.johnson@kohls.com


KOHL’S CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 

     Three Months Ended  

(Dollars in Millions, Except per Share Data)

   May 2, 2020     May 4, 2019  

Net sales

   $ 2,160     $ 3,821  

Other revenue

     268       266  
  

 

 

   

 

 

 

Total revenue

     2,428       4,087  

Cost of merchandise sold

     1,787       2,415  

Gross margin rate

     17.3 %      36.8 % 

Operating expenses:

    

Selling, general, and administrative

     1,066       1,275  

As a percent of total revenue

     43.9     31.2 % 

Depreciation and amortization

     227       230  

Impairments, store closing, and other costs

     66       49  
  

 

 

   

 

 

 

Operating (loss) income

     (718     118  

Interest expense, net

     58       52  
  

 

 

   

 

 

 

(Loss) income before income taxes

     (776     66  

Provision for income taxes

     (235     4  
  

 

 

   

 

 

 

Net (loss) income

   $ (541   $ 62  
  

 

 

   

 

 

 

Average number of shares:

    

Basic

     154       161  

Diluted

     155       162  

(Loss) earnings per share:

    

Basic

   $ (3.52   $ 0.38  

Diluted

   $ (3.50   $ 0.38  

ADJUSTED NET (LOSS) INCOME AND DILUTED (LOSS) EARNINGS PER SHARE, NON-GAAP FINANCIAL MEASURES

(Unaudited)

 

     Three Months Ended  

(Dollars in Millions, Except per Share Data)

   May 2, 2020     May 4, 2019  

Net (loss) income

    

GAAP

   $ (541   $ 62  

Impairments, store closing, and other costs

     46       36  
  

 

 

   

 

 

 

Adjusted (non-GAAP)

   $ (495   $ 98  
  

 

 

   

 

 

 

Diluted (loss) earnings per share

    

GAAP

   $ (3.50   $ 0.38  

Impairments, store closing, and other costs

     0.30       0.23  
  

 

 

   

 

 

 

Adjusted (non-GAAP)

   $ (3.20   $ 0.61  
  

 

 

   

 

 

 


KOHL’S CORPORATION

CONSOLIDATED BALANCE SHEETS

(Unaudited)

 

(Dollars in Millions)

   May 2, 2020      May 4, 2019  

Assets

     

Current assets:

     

Cash and cash equivalents

   $ 2,039      $ 543  

Merchandise inventories

     3,557        3,680  

Income tax receivable

     174        15  

Other

     400        397  
  

 

 

    

 

 

 

Total current assets

     6,170        4,635  

Property and equipment, net

     7,169        7,211  

Operating leases

     2,373        2,453  

Other assets

     157        167  
  

 

 

    

 

 

 

Total assets

   $ 15,869      $ 14,466  
  

 

 

    

 

 

 

Liabilities and Shareholders’ Equity

     

Current liabilities:

     

Accounts payable

   $ 1,866      $ 1,295  

Accrued liabilities

     1,070        1,184  

Income taxes payable

     68        40  

Current portion of:

     

Finance leases and financing obligations

     124        115  

Operating leases

     159        158  
  

 

 

    

 

 

 

Total current liabilities

     3,287        2,792  

Long-term debt

     3,449        1,855  

Finance leases and financing obligations

     1,351        1,225  

Operating leases

     2,605        2,680  

Deferred income taxes

     165        233  

Other long-term liabilities

     222        239  

Shareholders’ equity

     4,790        5,442  
  

 

 

    

 

 

 

Total liabilities and shareholders’ equity

   $ 15,869      $ 14,466  
  

 

 

    

 

 

 


KOHL’S CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

     Three Months Ended  

(Dollars in Millions)

   May 2, 2020     May 4, 2019  

Operating activities

    

Net (loss) income

   $ (541   $ 62  

Adjustments to reconcile net (loss) income to net cash provided by operating activities:

    

Depreciation and amortization

     227       230  

Share-based compensation

     15       15  

Deferred income taxes

     (91     18  

Impairments, store closing, and other costs

     51       49  

Non-cash inventory costs

     187       —    

Non-cash lease expense

     37       37  

Other non-cash expenses

     5       2  

Changes in operating assets and liabilities:

    

Merchandise inventories

     (205     (202

Other current and long-term assets

     (21     6  

Accounts payable

     660       108  

Accrued and other long-term liabilities

     (98     (141

Income taxes

     (139     1  

Operating lease liabilities

     (34     (49
  

 

 

   

 

 

 

Net cash provided by operating activities

     53       136  
  

 

 

   

 

 

 

Investing activities

    

Acquisition of property and equipment

     (162     (238
  

 

 

   

 

 

 

Net cash used in investing activities

     (162     (238
  

 

 

   

 

 

 

Financing activities

    

Proceeds from issuance of debt

     2,097       —    

Deferred financing costs

     (19     —    

Treasury stock purchases

     (8     (121

Shares withheld for taxes on vested restricted shares

     (20     (25

Dividends paid

     (108     (108

Reduction of long-term borrowings

     (497     (6

Finance lease and financing obligation payments

     (23     (31

Proceeds from stock option exercises

     —         2  

Proceeds from financing obligations

     3       —    
  

 

 

   

 

 

 

Net cash provided by (used in) financing activities

     1,425       (289
  

 

 

   

 

 

 

Net increase (decrease) in cash and cash equivalents

     1,316       (391

Cash and cash equivalents at beginning of period

     723       934  
  

 

 

   

 

 

 

Cash and cash equivalents at end of period

   $ 2,039     $ 543  
  

 

 

   

 

 

 
EX-99.2

Exhibit 99.2 Q1 2020 Results Presentation May 19, 2020 1Exhibit 99.2 Q1 2020 Results Presentation May 19, 2020 1


Cautionary Statement Regarding Forward-Looking Information This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as believes, anticipates, plans, may, intends, will, should, expects, and similar expressions are intended to identify forward-looking statements. Forward-looking statements include, but are not limited to, comments about Kohl's future financial plans, capital generation, management and deployment strategies, adequacy of capital resources and the competitive environment, including statements related to the ongoing implications of the novel coronavirus (COVID-19). Such statements are subject to certain risks and uncertainties, which could cause Kohl's actual results to differ materially from those anticipated by the forward-looking statements. These risks and uncertainties include, but are not limited to, those described in Item 1A in Kohl's Annual Report on Form 10-K, which is expressly incorporated herein by reference, and other factors as may periodically be described in Kohl's filings with the SEC. Any number of risks and uncertainties could cause actual results to differ materially from those Kohl’s expresses in its forward-looking statements, including the ability of Kohl’s to successfully navigate the impact of COVID-19; the short and long-term impact of COVID-19 on the economy, and retail and economic activity; changes in consumer behavior and confidence, including those changes related to rising unemployment rates; the duration and scope of COVID-19, and the pace of recovery thereafter; the actions that governments, businesses and individuals take in response to COVID-19, including store closures and limiting or prohibiting certain retail activities; general economic uncertainty and a worsening of economic conditions or low levels of economic growth; the effects of steps Kohl’s takes to reduce operating costs and increase its cash position; competitive conditions in the retail industry; relationships with Kohl’s associates, customers, vendors, lenders, and stockholders; and the availability of capital to operate Kohl’s business. Forward-looking statements speak as of the date they are made, and Kohl’s undertakes no obligation to update them. 
 Non-GAAP Financial Measures In addition, this presentation contains non-GAAP financial measures, including Adjusted EPS. Reconciliations of all non-GAAP measures to the most directly comparable GAAP measures are included in the Appendix of this presentation. 2 2Cautionary Statement Regarding Forward-Looking Information This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as believes, anticipates, plans, may, intends, will, should, expects, and similar expressions are intended to identify forward-looking statements. Forward-looking statements include, but are not limited to, comments about Kohl's future financial plans, capital generation, management and deployment strategies, adequacy of capital resources and the competitive environment, including statements related to the ongoing implications of the novel coronavirus (COVID-19). Such statements are subject to certain risks and uncertainties, which could cause Kohl's actual results to differ materially from those anticipated by the forward-looking statements. These risks and uncertainties include, but are not limited to, those described in Item 1A in Kohl's Annual Report on Form 10-K, which is expressly incorporated herein by reference, and other factors as may periodically be described in Kohl's filings with the SEC. Any number of risks and uncertainties could cause actual results to differ materially from those Kohl’s expresses in its forward-looking statements, including the ability of Kohl’s to successfully navigate the impact of COVID-19; the short and long-term impact of COVID-19 on the economy, and retail and economic activity; changes in consumer behavior and confidence, including those changes related to rising unemployment rates; the duration and scope of COVID-19, and the pace of recovery thereafter; the actions that governments, businesses and individuals take in response to COVID-19, including store closures and limiting or prohibiting certain retail activities; general economic uncertainty and a worsening of economic conditions or low levels of economic growth; the effects of steps Kohl’s takes to reduce operating costs and increase its cash position; competitive conditions in the retail industry; relationships with Kohl’s associates, customers, vendors, lenders, and stockholders; and the availability of capital to operate Kohl’s business. Forward-looking statements speak as of the date they are made, and Kohl’s undertakes no obligation to update them. Non-GAAP Financial Measures In addition, this presentation contains non-GAAP financial measures, including Adjusted EPS. Reconciliations of all non-GAAP measures to the most directly comparable GAAP measures are included in the Appendix of this presentation. 2 2


Key Historical Highlights Leading omnichannel retailer with 65 million customers in 2019 • Accelerating, high growth digital business with sales penetration of 24% in 2019 • History of strong free cash flow generation and prudent capital management • Demonstrated commitment to Investment Grade: $940M+ debt paid down in 2018-2019 • Unmatched brand portfolio with collection of strong private and national brands • Convenient, off-mall stores located primarily in suburban neighborhood strip centers • Industry leading loyalty program, including strong Kohl’s Charge Card sales penetration of 56% in 2019 • Strong culture with best-in-class customer and associate engagement • 3Key Historical Highlights Leading omnichannel retailer with 65 million customers in 2019 • Accelerating, high growth digital business with sales penetration of 24% in 2019 • History of strong free cash flow generation and prudent capital management • Demonstrated commitment to Investment Grade: $940M+ debt paid down in 2018-2019 • Unmatched brand portfolio with collection of strong private and national brands • Convenient, off-mall stores located primarily in suburban neighborhood strip centers • Industry leading loyalty program, including strong Kohl’s Charge Card sales penetration of 56% in 2019 • Strong culture with best-in-class customer and associate engagement • 3


Q1 2020 Results Presentation COVID-19 Update 1 Q1 2020 Results 2 Strategic Highlights 3 4Q1 2020 Results Presentation COVID-19 Update 1 Q1 2020 Results 2 Strategic Highlights 3 4


COVID-19 Update 5COVID-19 Update 5


Our Top Priorities Protecting the health and safety of our associates and customers Preserving our financial position 6 6Our Top Priorities Protecting the health and safety of our associates and customers Preserving our financial position 6 6


Protecting Associates And Customers Store Closures to Help Slow the Spread of the Virus th Closed all of our stores on March 20 • Temporarily furloughed 85,000 associates on March 30th and supported them • with two calendar weeks of pay and continuation of existing health benefits Enhanced Safety Measures as Stores Reopen Reopened about 50% of our stores across the country since May 4, 2020 • Following a set of criteria, including state guidelines, health data, store readiness, • and field insights Significant enhancements to the store environment and operations made to • prioritize the health and safety of Kohl’s customers and associates Limited store hours • Social distancing measures • Elevated cleaning and sanitization measures • • Associate wellness and temperature checks, safety training and the use of masks 7Protecting Associates And Customers Store Closures to Help Slow the Spread of the Virus th Closed all of our stores on March 20 • Temporarily furloughed 85,000 associates on March 30th and supported them • with two calendar weeks of pay and continuation of existing health benefits Enhanced Safety Measures as Stores Reopen Reopened about 50% of our stores across the country since May 4, 2020 • Following a set of criteria, including state guidelines, health data, store readiness, • and field insights Significant enhancements to the store environment and operations made to • prioritize the health and safety of Kohl’s customers and associates Limited store hours • Social distancing measures • Elevated cleaning and sanitization measures • • Associate wellness and temperature checks, safety training and the use of masks 7


Preserving Financial Position Leaned into Digital business and quickly updated digital site • Drive content to reflect customer interest Digital Sales Launched Store Drive Up on April 2nd in most stores • Inventory: Managed receipts lower and extended payment terms • SG&A: Significantly reduced expenses across all areas • Reduced Capex: Lowered 2020 forecast by $500 million • Cash Outflow Dividend: Suspended beginning in Q2 2020 • Share repurchases: Suspended   • Increased Revolver: Replaced, securitized, and upsized to $1.5 billion • Financial New Debt: Issued $600 million notes due 2025 • Liquidity 8Preserving Financial Position Leaned into Digital business and quickly updated digital site • Drive content to reflect customer interest Digital Sales Launched Store Drive Up on April 2nd in most stores • Inventory: Managed receipts lower and extended payment terms • SG&A: Significantly reduced expenses across all areas • Reduced Capex: Lowered 2020 forecast by $500 million • Cash Outflow Dividend: Suspended beginning in Q2 2020 • Share repurchases: Suspended • Increased Revolver: Replaced, securitized, and upsized to $1.5 billion • Financial New Debt: Issued $600 million notes due 2025 • Liquidity 8


Q1 2020 Results 9Q1 2020 Results 9


Q1 2020 Results Key Takeaways Entered 2020 in a strong financial position with business tracking to expectations prior to the crisis • Immediately responded with aggressive actions to significantly enhance financial flexibility • Positive operating cash flow in Q1 achieved through collective actions • Ended quarter with $2.0 billion in cash and $500 million of availability on our revolver • Q1 2020 Results COVID-19 materially impacted results as all stores were closed beginning on March 20th • Total revenue (41%), with net sales (43%) and other revenue flat • Digital sales +24%, and accelerated to +60% in the month of April • Gross margin significantly contracted due to COVID-19 impact • SG&A expense declined 16% in Q1, yet declined 19.5% excluding COVID-19 expenses • 1 Adjusted EPS ($3.20) vs. $0.61 in prior year • Inventory declined 3% year-over-year and receipts were down over 30% • 10 10 (1) Adjusted EPS is a non-GAAP financial measure. Please refer to the reconciliation included in the Appendix for more information. Q1 2020 Results Key Takeaways Entered 2020 in a strong financial position with business tracking to expectations prior to the crisis • Immediately responded with aggressive actions to significantly enhance financial flexibility • Positive operating cash flow in Q1 achieved through collective actions • Ended quarter with $2.0 billion in cash and $500 million of availability on our revolver • Q1 2020 Results COVID-19 materially impacted results as all stores were closed beginning on March 20th • Total revenue (41%), with net sales (43%) and other revenue flat • Digital sales +24%, and accelerated to +60% in the month of April • Gross margin significantly contracted due to COVID-19 impact • SG&A expense declined 16% in Q1, yet declined 19.5% excluding COVID-19 expenses • 1 Adjusted EPS ($3.20) vs. $0.61 in prior year • Inventory declined 3% year-over-year and receipts were down over 30% • 10 10 (1) Adjusted EPS is a non-GAAP financial measure. Please refer to the reconciliation included in the Appendix for more information.


Q1 2020 Key Metrics Consolidated Statement of Operations Three Months Ended (Dollars in Millions, Except EPS data) May 2, 2020 May 4, 2019 Net Sales $ 2,160 $ 3,821 Total Revenue 2,428 4,087 Gross Margin Rate 17.3% 36.8% SG&A Expenses 1,066 1,275 Depreciation and Amortization 227 230 Impairments, Store Closings, and Other Costs 66 49 Operating (Loss) Income $ (718) $ 118 Interest Expense, Net 58 52 Provision for Income Taxes (235) 4 Net (Loss) Income $ (541) $ 62 Diluted (Loss) Earnings per Share ($3.50) $0.38 Adusted Net (Loss) Income (Non-GAAP) $ (495) $ 98 Diluted Adjusted (Loss) Earnings per Share (Non-GAAP) ($3.20) $0.61 Key Balance Sheet Items May 2, 2020 May 4, 2019 (Dollars in millions) Cash and Cash Equivalents $ 2,039 $ 543 Merchandise Inventories 3,557 3,680 Accounts Payable 1,866 1,295 Long-term Debt 3,449 1,855 11 11 11 Adjusted EPS is a non-GAAP financial measure. Please refer to the reconciliation included in the Appendix for more information. Q1 2020 Key Metrics Consolidated Statement of Operations Three Months Ended (Dollars in Millions, Except EPS data) May 2, 2020 May 4, 2019 Net Sales $ 2,160 $ 3,821 Total Revenue 2,428 4,087 Gross Margin Rate 17.3% 36.8% SG&A Expenses 1,066 1,275 Depreciation and Amortization 227 230 Impairments, Store Closings, and Other Costs 66 49 Operating (Loss) Income $ (718) $ 118 Interest Expense, Net 58 52 Provision for Income Taxes (235) 4 Net (Loss) Income $ (541) $ 62 Diluted (Loss) Earnings per Share ($3.50) $0.38 Adusted Net (Loss) Income (Non-GAAP) $ (495) $ 98 Diluted Adjusted (Loss) Earnings per Share (Non-GAAP) ($3.20) $0.61 Key Balance Sheet Items May 2, 2020 May 4, 2019 (Dollars in millions) Cash and Cash Equivalents $ 2,039 $ 543 Merchandise Inventories 3,557 3,680 Accounts Payable 1,866 1,295 Long-term Debt 3,449 1,855 11 11 11 Adjusted EPS is a non-GAAP financial measure. Please refer to the reconciliation included in the Appendix for more information.


Q1 Gross Margin Q1 2019 Gross Margin 36.8% Usual clearance permanent markdowns in February spread • across significantly lower sales due to COVID-19 Inventory Actions (~1,500) bps Established a reserve for excess seasonal inventory given • the lower sales demand due to COVID-19 Cost of shipping pressure driven by significant shift of sales • to Digital in Q1 2020 (45% of total sales) vs. Q1 2019 (21% of Cost of Shipping (~250) bps total sales) due to store closures related to COVID-19 Unfavorable product mix as Home category outperformed • (~200) bps Mix / Other and increased promotional activity Q1 2020 Gross Margin 17.3% 12 12Q1 Gross Margin Q1 2019 Gross Margin 36.8% Usual clearance permanent markdowns in February spread • across significantly lower sales due to COVID-19 Inventory Actions (~1,500) bps Established a reserve for excess seasonal inventory given • the lower sales demand due to COVID-19 Cost of shipping pressure driven by significant shift of sales • to Digital in Q1 2020 (45% of total sales) vs. Q1 2019 (21% of Cost of Shipping (~250) bps total sales) due to store closures related to COVID-19 Unfavorable product mix as Home category outperformed • (~200) bps Mix / Other and increased promotional activity Q1 2020 Gross Margin 17.3% 12 12


Enhanced Liquidity Position Key Q1 2020 Balance Sheet & Cash Flow Items February 1, 2020 Key Takeaways Beginning Cash $723M Long history of disciplined and prudent • Sources capital management Revolver $1,000M More than two decades of maintaining • New Debt $600M Investment Grade rating Operating Cash Flow $53M Swift and aggressive actions taken to • Uses ensure appropriate financial liquidity to Capex ($162M) manage through crisis Dividend ($108M) Confident that actions taken will • Share Repurchase ($8M) successfully preserve financial position of May 2, 2020 the company Ending Cash $2,039M 13 13Enhanced Liquidity Position Key Q1 2020 Balance Sheet & Cash Flow Items February 1, 2020 Key Takeaways Beginning Cash $723M Long history of disciplined and prudent • Sources capital management Revolver $1,000M More than two decades of maintaining • New Debt $600M Investment Grade rating Operating Cash Flow $53M Swift and aggressive actions taken to • Uses ensure appropriate financial liquidity to Capex ($162M) manage through crisis Dividend ($108M) Confident that actions taken will • Share Repurchase ($8M) successfully preserve financial position of May 2, 2020 the company Ending Cash $2,039M 13 13


Strategic Highlights 14Strategic Highlights 14


Kohl's is a leading omnichannel retailer with a strong foundation, and a large and loyal customer base of 65 million An unmatched Easy and inspiring Leading 
 brand portfolio at experiences loyalty program the best value 15 15 Based on 2019 FiguresKohl's is a leading omnichannel retailer with a strong foundation, and a large and loyal customer base of 65 million An unmatched Easy and inspiring Leading brand portfolio at experiences loyalty program the best value 15 15 Based on 2019 Figures


Strategic Focus Areas Strengthening Elevating Leading 
 Operating
 product the the next with leadership experience generation excellence of loyalty 16 16Strategic Focus Areas Strengthening Elevating Leading Operating product the the next with leadership experience generation excellence of loyalty 16 16


Brands Strong collection of private brands
 Two
 $7B
 4 of top 5
 $1B 
 private 
 brands are 
 brand sales private brands 17 Based on 2019 FiguresBrands Strong collection of private brands Two $7B 4 of top 5 $1B private brands are brand sales private brands 17 Based on 2019 Figures


Brands Strong collection of national brands
 18Brands Strong collection of national brands 18


The power of our store base 80% 1,159 of Americans live within 
 stores in 49 states 15 miles of a Kohl's Store 95% 99% of stores 4-wall cash-flow of Kohl's stores
 positive in 2019 are off mall Digital sales are 35%+ higher 
 of digital orders with proximity to stores fulfilled by stores 19 Based on 2019 FiguresThe power of our store base 80% 1,159 of Americans live within stores in 49 states 15 miles of a Kohl's Store 95% 99% of stores 4-wall cash-flow of Kohl's stores positive in 2019 are off mall Digital sales are 35%+ higher of digital orders with proximity to stores fulfilled by stores 19 Based on 2019 Figures


Customer behaviors are influencing their expectations of the retail experience Shift to 
 Mobile use Social media digital increase influence 50% 70%+ 16M of Kohl's digital of Kohl's traffic active Kohl’s 
 sales are on mobile occurs through App users smartphones 20 Based on 2019 FiguresCustomer behaviors are influencing their expectations of the retail experience Shift to Mobile use Social media digital increase influence 50% 70%+ 16M of Kohl's digital of Kohl's traffic active Kohl’s sales are on mobile occurs through App users smartphones 20 Based on 2019 Figures


Digital has been key growth driver Digital sales $4.5B $4.0B $3.6B $3.0B $2.7B $2.1B Sales 11% 24% penetration 2014 2015 2016 2017 2018 2019 21 17% CAGRDigital has been key growth driver Digital sales $4.5B $4.0B $3.6B $3.0B $2.7B $2.1B Sales 11% 24% penetration 2014 2015 2016 2017 2018 2019 21 17% CAGR


Kohl’s has a leading loyalty program #1 30M 56% Loyalty program 
 Loyalty Kohl’s Charge card 4 years running members penetration Based on 2019 Figures 22 Source: Bond Loyalty ReportKohl’s has a leading loyalty program #1 30M 56% Loyalty program Loyalty Kohl’s Charge card 4 years running members penetration Based on 2019 Figures 22 Source: Bond Loyalty Report


Recent investments are paying off Active Beauty Digital Amazon Sales nearly 
 Sales increased Achieved 17% 
 Innovation to drive doubled 
 nearly 40% in past 
 5-year sales CAGR traffic into stores since 2013 5 years 23 Based on 2019 FiguresRecent investments are paying off Active Beauty Digital Amazon Sales nearly Sales increased Achieved 17% Innovation to drive doubled nearly 40% in past 5-year sales CAGR traffic into stores since 2013 5 years 23 Based on 2019 Figures


Our Capital Allocation Priorities Opportunistic, Invest in 
 Share 
 Dividend complementary
 1 2 3 4 the business repurchases M&A Maintain strong balance sheet Long-term objective of maintaining investment grade 24 Due to COVID-19, the Company has reduced its investment in the business and has suspended its dividend and share repurchase program. Our Capital Allocation Priorities Opportunistic, Invest in Share Dividend complementary 1 2 3 4 the business repurchases M&A Maintain strong balance sheet Long-term objective of maintaining investment grade 24 Due to COVID-19, the Company has reduced its investment in the business and has suspended its dividend and share repurchase program.


Appendix 25Appendix 25


Reconciliations Adjusted Net (Loss) Income and Diluted (Loss) Earnings per Share, Non-GAAP Financial Measures (Unaudited) Three Months Ended (Dollars in Millions, Except per Share Data) May 2, 2020 May 4, 2019 Net (Loss) Income • GAAP $ (541) $ 62 • Impairments, store closing, and other costs 46 36 • Adjusted (non-GAAP) $ (495) $ 98 Diluted (Loss) Earnings per Share • GAAP $ (3.50) $ 0.38 • Impairments, store closing, and other costs 0.30 0.23 • Adjusted (non-GAAP) $ (3.20) $ 0.61 26 26Reconciliations Adjusted Net (Loss) Income and Diluted (Loss) Earnings per Share, Non-GAAP Financial Measures (Unaudited) Three Months Ended (Dollars in Millions, Except per Share Data) May 2, 2020 May 4, 2019 Net (Loss) Income • GAAP $ (541) $ 62 • Impairments, store closing, and other costs 46 36 • Adjusted (non-GAAP) $ (495) $ 98 Diluted (Loss) Earnings per Share • GAAP $ (3.50) $ 0.38 • Impairments, store closing, and other costs 0.30 0.23 • Adjusted (non-GAAP) $ (3.20) $ 0.61 26 26


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