8-K
KOHLS Corp false 0000885639 0000885639 2020-08-18 2020-08-18

 

 

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): August 18, 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 August 18, 2020, Kohl’s Corporation issued a press release reporting its earnings for the quarter ended August 1, 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.

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, and in Item 1A of Part II in the Company’s Quarterly Report on Form 10-Q for the quarter ended May 2, 2020, 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 Kohl’s undertakes no obligation to update them.

In this press release and presentation materials, the Company provides information regarding adjusted net (loss) income, adjusted diluted (loss) earnings per share, adjusted EBITDA, and free cash flow, 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. Reconciliations of adjusted net (loss) income, adjusted diluted (loss) earnings per share, adjusted EBITDA, and free cash flow are 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 August 18, 2020
99.2    Presentation Materials for August 18, 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: August 18, 2020

    KOHL’S CORPORATION
    By:  

/s/ Jason J. Kelroy

      Jason J. Kelroy
      Senior Executive Vice President,
General Counsel and Corporate Secretary
EX-99.1

Exhibit 99.1

Kohl’s Corporation Reports Financial Results

 

   

Strengthened financial position during the quarter, ending with $2.4 billion in cash

   

Disciplined management of expenses and inventory resulted in positive operating cash flow

   

Second quarter net sales decrease (22.9%)

   

Second quarter diluted earnings per share of $0.30; adjusted loss per share(2) of ($0.25)

MENOMONEE FALLS, Wis.—(BUSINESS WIRE)—August 18, 2020— Kohl’s Corporation (NYSE:KSS) today reported results for the quarter ended August 1, 2020.

 

     Three Months     Six Months  

($ in millions, except per share data)

   August 1,
2020
    August 3,
2019
    Change     August 1,
2020
    August 3,
2019
    Change  

Total revenue

   $ 3,407     $ 4,430       (23.1 )%    $ 5,835     $ 8,517       (31.5 )% 

Net sales(1)

     (22.9 )%      (3.3 )%        (32.8 )%      (3.3 )%   

Gross margin

     33.1     38.8     (569 ) bps      26.8     37.9     (1,109 ) bps 

Selling, general, and administrative expenses

   $ 1,050     $ 1,269       (17.3 )%    $ 2,116     $ 2,544       (16.8 )% 

Reported

            

Net income (loss)

   $ 47     $ 241       (80 )%    $ (494   $ 303       (263 )% 

Diluted earnings (loss) per share

   $ 0.30     $ 1.51       (80 )%    $ (3.21   $ 1.89       (270 )% 

Non-GAAP(2)

            

Adjusted net (loss) income

   $ (39   $ 247       (116 )%    $ (534   $ 345       (255 )% 

Adjusted diluted (loss) earnings per share

   $ (0.25   $ 1.55       (116 )%    $ (3.47   $ 2.15       (261 )% 

 

(1)

Represents change in Net sales vs. prior year period. We are not reporting comparable sales due to store closures.

(2)

Excludes Impairments, store closing, and other costs and Gain on sale of real estate.

“Our organization continues to navigate through a period of extraordinary change and uncertainty presented by the COVID-19 crisis. During the second quarter we made significant progress in rebuilding our business. We reopened all of our stores with new safety and operating procedures, accelerated digital growth, and showed great discipline in managing inventory and expenses meaningfully lower. In doing so, we generated positive operating cash flow and further enhanced our financial position,” said Michelle Gass, Kohl’s chief executive officer.

“As we look ahead, we are planning for the crisis to continue to impact our business in the near-term,” said Gass. “We are well-positioned to capitalize on evolving customer behaviors and the retail industry disruption, which we believe will drive long-term growth and increased market share.”

Second Quarter 2020 Earnings Conference Call

Kohl’s will host its quarterly earnings conference call at 9:00 am ET on August 18, 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, and in Item 1A of Part II in the Company’s Quarterly Report on Form 10-Q for the quarter ended May 2, 2020, 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 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     Six Months Ended  

(Dollars in Millions, Except per Share Data)

   August 1,
2020
    August 3,
2019
    August 1,
2020
    August 3,
2019
 

Net sales

   $ 3,213     $ 4,169     $ 5,373     $ 7,990  

Other revenue

     194       261       462       527  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total revenue

     3,407       4,430       5,835       8,517  

Cost of merchandise sold

     2,149       2,550       3,936       4,965  

Gross margin rate

     33.1     38.8     26.8     37.9

Operating expenses:

        

Selling, general, and administrative

     1,050       1,269       2,116       2,544  

As a percent of total revenue

     30.8     28.6     36.3     29.9

Depreciation and amortization

     219       228       446       458  

Impairments, store closing, and other

     (2     7       64       56  

(Gain) on sale of real estate

     (127     —         (127     —    
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating income (loss)

     118       376       (600     494  

Interest expense, net

     78       53       136       105  
  

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) before income taxes

     40       323       (736     389  

(Benefit) provision for income taxes

     (7     82       (242     86  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss)

   $ 47     $ 241     $ (494   $ 303  
  

 

 

   

 

 

   

 

 

   

 

 

 

Average number of shares:

        

Basic

     154       159       154       160  

Diluted

     155       159       154       161  

Earnings (loss) per share:

        

Basic

   $ 0.31     $ 1.52     $ (3.21   $ 1.90  

Diluted

   $ 0.30     $ 1.51     $ (3.21   $ 1.89  
  

 

 

   

 

 

   

 

 

   

 

 

 

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

(Unaudited)

 

     Three Months Ended     Six Months Ended  

(Dollars in Millions, Except per Share Data)

   August 1,
2020
    August 3,
2019
    August 1,
2020
    August 3,
2019
 

Net income (loss)

        

GAAP

   $ 47     $ 241     $ (494   $ 303  

Impairments, store closing, and other

     (2     7       64       56  

(Gain) on sale of real estate

     (127     —         (127     —    

Income tax impact of items noted above

     43       (1     23       (14
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted (non-GAAP)

   $ (39   $ 247     $ (534   $ 345  
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted (loss) earnings per share

        

GAAP(1)

   $ 0.30     $ 1.51     $ (3.21   $ 1.89  

Impairments, store closing, and other

     (0.01     0.05       0.41       0.35  

(Gain) on sale of real estate

     (0.82     —         (0.82     —    

Income tax impact of items noted above

     0.28       (0.01     0.15       (0.09
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted (non-GAAP)(2)

   $ (0.25   $ 1.55     $ (3.47   $ 2.15  
  

 

 

   

 

 

   

 

 

   

 

 

 

 

(1)

Weighted average diluted shares outstanding for purpose of calculating diluted earnings per share for the three months ended August 1, 2020 was 155 million, which includes the dilutive effect of share-based awards as determined under the treasury stock method.

(2)

Weighted average diluted shares outstanding for purposes of calculating diluted adjusted (loss) earnings per share for the three months ended August 1, 2020 was 154 million as the effect of including dilutive shares would be antidilutive.


KOHL’S CORPORATION

CONSOLIDATED BALANCE SHEETS

(Unaudited)

 

(Dollars in Millions)

   August 1,
2020
     August 3,
2019
 

Assets

     

Current assets:

     

Cash and cash equivalents

   $ 2,428      $ 625  

Merchandise inventories

     2,698        3,656  

Income tax receivable

     205        16  

Other

     357        381  
  

 

 

    

 

 

 

Total current assets

     5,688        4,678  

Property and equipment, net

     6,970        7,276  

Operating leases

     2,418        2,428  

Other assets

     159        160  
  

 

 

    

 

 

 

Total assets

   $ 15,235      $ 14,542  
  

 

 

    

 

 

 

Liabilities and Shareholders’ Equity

     

Current liabilities:

     

Accounts payable

   $ 1,064      $ 1,330  

Accrued liabilities

     1,130        1,199  

Income taxes payable

     86        34  

Current portion of:

     

Finance leases and financing obligations

     126        119  

Operating leases

     160        158  
  

 

 

    

 

 

 

Total current liabilities

     2,566        2,840  

Long-term debt

     3,450        1,855  

Finance leases and financing obligations

     1,356        1,270  

Operating leases

     2,637        2,647  

Deferred income taxes

     122        254  

Other long-term liabilities

     267        221  

Shareholders’ equity

     4,837        5,455  
  

 

 

    

 

 

 

Total liabilities and shareholders’ equity

   $ 15,235      $ 14,542  
  

 

 

    

 

 

 


KOHL’S CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

     Six Months Ended  

(Dollars in Millions)

   August 1,
2020
    August 3,
2019
 

Operating activities

    

Net (loss) income

   $ (494   $ 303  

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

    

Depreciation and amortization

     446       458  

Share-based compensation

     14       27  

Deferred income taxes

     (132     41  

Impairments, store closing, and other costs

     48       45  

(Gain) on sale of real estate

     (127     —    

Non-cash inventory costs

     187       —    

Non-cash lease expense

     74       75  

Other non-cash expenses

     10       3  

Changes in operating assets and liabilities:

    

Merchandise inventories

     656       (175

Other current and long-term assets

     20       29  

Accounts payable

     (142     143  

Accrued and other long-term liabilities

     (23     (177

Income taxes

     (151     (8

Operating lease liabilities

     (82     (88
  

 

 

   

 

 

 

Net cash provided by operating activities

     304       676  
  

 

 

   

 

 

 

Investing activities

    

Acquisition of property and equipment

     (196     (439

Proceeds from sale of real estate

     193        
  

 

 

   

 

 

 

Net cash used in investing activities

     (3     (439
  

 

 

   

 

 

 

Financing activities

    

Proceeds from issuance of debt

     2,097       —    

Deferred financing costs

     (19     —    

Treasury stock purchases

     (8     (254

Shares withheld for taxes on vested restricted shares

     (20     (27

Dividends paid

     (108     (214

Reduction of long-term borrowings

     (497     (6

Finance lease and financing obligation payments

     (44     (60

Proceeds from stock option exercises

     —         2  

Proceeds from financing obligations

     3       13  
  

 

 

   

 

 

 

Net cash provided by (used in) financing activities

     1,404       (546
  

 

 

   

 

 

 

Net increase (decrease) in cash and cash equivalents

     1,705       (309

Cash and cash equivalents at beginning of period

     723       934  
  

 

 

   

 

 

 

Cash and cash equivalents at end of period

   $ 2,428     $ 625  
  

 

 

   

 

 

 
EX-99.2

Exhibit 99.2 Q2 2020 Results Presentation August 18, 2020Exhibit 99.2 Q2 2020 Results Presentation August 18, 2020


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 and in Item 1A of Part II in Kohl’s Quarterly Report on Form 10-Q for the quarter ended May 2, 2020, which are expressly incorporated herein by reference, and other factors as may periodically be described in Kohl's filings with the SEC. 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, Adjusted Net Income, Adjusted EBITDA, and Free Cash Flow. Reconciliations of all non-GAAP measures to the most directly comparable GAAP measures are included in the Appendix of this presentation. 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 and in Item 1A of Part II in Kohl’s Quarterly Report on Form 10-Q for the quarter ended May 2, 2020, which are expressly incorporated herein by reference, and other factors as may periodically be described in Kohl's filings with the SEC. 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, Adjusted Net Income, Adjusted EBITDA, and Free Cash Flow. Reconciliations of all non-GAAP measures to the most directly comparable GAAP measures are included in the Appendix of this presentation. 2


Kohl’s Profile Leading omnichannel retailer serving today’s family with 65 million customers • Unmatched brand portfolio at the best value with a collection of strong national and private brands • Fast growing digital business, driven by mobile and the Kohl’s App • Profitable and convenient off-mall stores located in suburban neighborhoods close to customers • Industry leading loyalty program and strong Kohl’s Charge card sales penetration • History of strong free cash flow generation and prudent capital management • Strong culture with best-in-class customer and associate engagement • 1,163 24% 65M 30M Digital Sales Loyalty Stores Customers* Penetration* Members* * Based on 2019 figures 3Kohl’s Profile Leading omnichannel retailer serving today’s family with 65 million customers • Unmatched brand portfolio at the best value with a collection of strong national and private brands • Fast growing digital business, driven by mobile and the Kohl’s App • Profitable and convenient off-mall stores located in suburban neighborhoods close to customers • Industry leading loyalty program and strong Kohl’s Charge card sales penetration • History of strong free cash flow generation and prudent capital management • Strong culture with best-in-class customer and associate engagement • 1,163 24% 65M 30M Digital Sales Loyalty Stores Customers* Penetration* Members* * Based on 2019 figures 3


Kohl’s is Positioned for Long-term Success Well-disciplined operator, leveraging strong financial position to • effectively navigate through COVID-19 crisis Strong foundation, solidified through years of investment in digital and • omnichannel capabilities, innovative store experiences, loyalty enhancements, and new brand introductions Uniquely-positioned, and evolving strategies, to capitalize on changing • consumer behaviors and the significant disruption of the retail industry 4Kohl’s is Positioned for Long-term Success Well-disciplined operator, leveraging strong financial position to • effectively navigate through COVID-19 crisis Strong foundation, solidified through years of investment in digital and • omnichannel capabilities, innovative store experiences, loyalty enhancements, and new brand introductions Uniquely-positioned, and evolving strategies, to capitalize on changing • consumer behaviors and the significant disruption of the retail industry 4


Q2 2020 Results Presentation COVID-19 Update 1 Q2 2020 Results 2 2H 2020 Outlook & Initiatives 3 5Q2 2020 Results Presentation COVID-19 Update 1 Q2 2020 Results 2 2H 2020 Outlook & Initiatives 3 5


COVID-19 Update 6COVID-19 Update 6


Our Top Priorities Protecting the Preserving our health and financial safety of our position associates and customers 7Our Top Priorities Protecting the Preserving our health and financial safety of our position associates and customers 7


Protecting Associates And Customers Store Closures to Help Slow the Spread of the Virus th Closed all of our stores on March 20 • Leaned into Digital business and launched Store Drive Up on April 2nd • Enhanced Safety Measures as Stores Reopened Reopened all stores over a 10 week period during Q2 2020 • Significant enhancements to the store environment and operations made to • prioritize the health and safety of Kohl’s associates and customers Limited store hours • Social distancing measures (e.g., installing checkout plexiglass, widening store aisles, • closing fitting rooms) Elevated cleaning and sanitization measures (e.g., carts, POS keypads) • Associate wellness checks, safety training, and the required use of masks for associates • and customers • Introduced Store Drive Up limited contact customer pickup capability Our proactive measures for associate and customer safety have been recognized • among the best of all retailers 8 8Protecting Associates And Customers Store Closures to Help Slow the Spread of the Virus th Closed all of our stores on March 20 • Leaned into Digital business and launched Store Drive Up on April 2nd • Enhanced Safety Measures as Stores Reopened Reopened all stores over a 10 week period during Q2 2020 • Significant enhancements to the store environment and operations made to • prioritize the health and safety of Kohl’s associates and customers Limited store hours • Social distancing measures (e.g., installing checkout plexiglass, widening store aisles, • closing fitting rooms) Elevated cleaning and sanitization measures (e.g., carts, POS keypads) • Associate wellness checks, safety training, and the required use of masks for associates • and customers • Introduced Store Drive Up limited contact customer pickup capability Our proactive measures for associate and customer safety have been recognized • among the best of all retailers 8 8


Preserving Financial Position Enhanced site functionality, personalization, and shopability • Drive More efficient Digital marketing (e.g., digital search, media buying) • Digital Sales Store Drive Up continues to resonate with customers • Inventory: 26% reduction in Q2 2020 • SG&A: 17% decline in Q2 2020 • Reduced Capex: 55% reduction year-to-date 2020 • Cash Dividend: Suspended beginning in Q2 2020 • Outflow Share repurchases: Suspended   • Revolver: Replaced, securitized, and upsized to $1.5 billion in Q1 2020 • Increased New Debt: Issued $600 million notes due 2025 in Q1 2020 • Financial Sale-leaseback: Completed sale of two facilities for $193 million in Q2 2020 • Liquidity 9Preserving Financial Position Enhanced site functionality, personalization, and shopability • Drive More efficient Digital marketing (e.g., digital search, media buying) • Digital Sales Store Drive Up continues to resonate with customers • Inventory: 26% reduction in Q2 2020 • SG&A: 17% decline in Q2 2020 • Reduced Capex: 55% reduction year-to-date 2020 • Cash Dividend: Suspended beginning in Q2 2020 • Outflow Share repurchases: Suspended • Revolver: Replaced, securitized, and upsized to $1.5 billion in Q1 2020 • Increased New Debt: Issued $600 million notes due 2025 in Q1 2020 • Financial Sale-leaseback: Completed sale of two facilities for $193 million in Q2 2020 • Liquidity 9


Q2 2020 Results 10Q2 2020 Results 10


Q2 2020 Results Key Takeaways Q2 2020 results impacted by COVID as stores operated with approximately 25% fewer days than last year and • with limited hours Effectively navigating through COVID-19 crisis and made significant progress in rebuilding business in Q2 2020 • Reopened all stores with new safety and operating procedures and accelerated digital growth • (1) Disciplined management of expenses and inventory resulted in positive operating and free cash flow • Strengthened financial position during the quarter, ending with $2.4 billion in cash and $500 million of • availability on our revolver Q2 2020 Results Net sales declined 23%, with digital sales +58% as compared to last year • Gross margin contracted due to increased promotional activity, mix, and higher cost of shipping • SG&A expense declined 17% in Q2, and declined 19% excluding COVID-19 expenses • (1) Adjusted EBITDA of $208 million in Q2 2020 • (1) Adjusted EPS ($0.25) vs. $1.55 in prior year • Inventory declined 26% versus last year • 11 11 (1) - Free Cash Flow, Adjusted EBITDA, and Adjusted EPS are non-GAAP financial measures. Please refer to the reconciliation included in the Appendix for more information. Q2 2020 Results Key Takeaways Q2 2020 results impacted by COVID as stores operated with approximately 25% fewer days than last year and • with limited hours Effectively navigating through COVID-19 crisis and made significant progress in rebuilding business in Q2 2020 • Reopened all stores with new safety and operating procedures and accelerated digital growth • (1) Disciplined management of expenses and inventory resulted in positive operating and free cash flow • Strengthened financial position during the quarter, ending with $2.4 billion in cash and $500 million of • availability on our revolver Q2 2020 Results Net sales declined 23%, with digital sales +58% as compared to last year • Gross margin contracted due to increased promotional activity, mix, and higher cost of shipping • SG&A expense declined 17% in Q2, and declined 19% excluding COVID-19 expenses • (1) Adjusted EBITDA of $208 million in Q2 2020 • (1) Adjusted EPS ($0.25) vs. $1.55 in prior year • Inventory declined 26% versus last year • 11 11 (1) - Free Cash Flow, Adjusted EBITDA, and Adjusted EPS are non-GAAP financial measures. Please refer to the reconciliation included in the Appendix for more information.


Q2 2020 Key Metrics Consolidated Statement of Operations Three Months Ended (Dollars in Millions, Except EPS data) August 1, 2020 August 3, 2019 Net Sales $ 3,213 $ 4,169 Total Revenue 3,407 4,430 Gross Margin Rate 33.1% 38.8% SG&A 1,050 1,269 Depreciation 219 228 (Gain) on Sale of Real Estate (127) — Impairments, Store Closings, and Other Costs (2) 7 Operating Income $ 118 $ 376 Interest Expense 78 53 Provision for Income Taxes (7) 82 Net Income $ 47 $ 241 Diluted EPS $0.30 $1.51 (1) $ (39) $ 247 Adjusted Net Income (Non-GAAP) (1) $(0.25) $1.55 Adjusted Diluted EPS (Non-GAAP) Key Balance Sheet Items August 1, 2020 August 3, 2019 (Dollars in Millions) Cash and Cash Equivalents $ 2,428 $ 625 Merchandise Inventories 2,698 3,656 Accounts Payable 1,064 1,330 Long-term Debt 3,450 1,855 Key Cash Flow items August 1, 2020 (Dollars in Millions) Three Months Ended Six Months Ended Operating Cash Flow $ 251 $ 304 Capital Expenditures 34 196 Net, Finance lease and financing obligations 21 41 (1) $ 196 $ 67 Free Cash Flow 12 12 12 (1) - Free Cash Flow, Adjusted Net Income, and Adjusted EPS are non-GAAP financial measures. Please refer to the reconciliation included in the Appendix for more information. Q2 2020 Key Metrics Consolidated Statement of Operations Three Months Ended (Dollars in Millions, Except EPS data) August 1, 2020 August 3, 2019 Net Sales $ 3,213 $ 4,169 Total Revenue 3,407 4,430 Gross Margin Rate 33.1% 38.8% SG&A 1,050 1,269 Depreciation 219 228 (Gain) on Sale of Real Estate (127) — Impairments, Store Closings, and Other Costs (2) 7 Operating Income $ 118 $ 376 Interest Expense 78 53 Provision for Income Taxes (7) 82 Net Income $ 47 $ 241 Diluted EPS $0.30 $1.51 (1) $ (39) $ 247 Adjusted Net Income (Non-GAAP) (1) $(0.25) $1.55 Adjusted Diluted EPS (Non-GAAP) Key Balance Sheet Items August 1, 2020 August 3, 2019 (Dollars in Millions) Cash and Cash Equivalents $ 2,428 $ 625 Merchandise Inventories 2,698 3,656 Accounts Payable 1,064 1,330 Long-term Debt 3,450 1,855 Key Cash Flow items August 1, 2020 (Dollars in Millions) Three Months Ended Six Months Ended Operating Cash Flow $ 251 $ 304 Capital Expenditures 34 196 Net, Finance lease and financing obligations 21 41 (1) $ 196 $ 67 Free Cash Flow 12 12 12 (1) - Free Cash Flow, Adjusted Net Income, and Adjusted EPS are non-GAAP financial measures. Please refer to the reconciliation included in the Appendix for more information.


Q2 2020 Gross Margin Q2 2019 Gross Margin 38.8% Increased promotional activity and product mix impact as (~295) bps Mix / Promos Home category outperformed Cost of shipping pressure driven by significant shift of sales to Digital in Q2 2020 (41% of total sales) vs. Q2 2019 (20% Cost of Shipping (~275) bps of total sales) due to store closures related to COVID-19 Q2 2020 Gross Margin 33.1% 13 13Q2 2020 Gross Margin Q2 2019 Gross Margin 38.8% Increased promotional activity and product mix impact as (~295) bps Mix / Promos Home category outperformed Cost of shipping pressure driven by significant shift of sales to Digital in Q2 2020 (41% of total sales) vs. Q2 2019 (20% Cost of Shipping (~275) bps of total sales) due to store closures related to COVID-19 Q2 2020 Gross Margin 33.1% 13 13


Enhanced Liquidity Position Key Balance Sheet & Cash Flow Items: Q2 / YTD 2020 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 $304M Sales-leaseback $193M Effectively navigating through the crisis • Uses and further strengthened liquidity position Capex ($196M) in Q2 2020 Dividend ($108M) Share Repurchase ($8M) Well-positioned to capitalize on evolving • customer behaviors and the retail industry August 1, 2020 disruption Ending Cash $2,428M 14Enhanced Liquidity Position Key Balance Sheet & Cash Flow Items: Q2 / YTD 2020 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 $304M Sales-leaseback $193M Effectively navigating through the crisis • Uses and further strengthened liquidity position Capex ($196M) in Q2 2020 Dividend ($108M) Share Repurchase ($8M) Well-positioned to capitalize on evolving • customer behaviors and the retail industry August 1, 2020 disruption Ending Cash $2,428M 14


Our Capital Allocation Priorities 1 2 3 4 Opportunistic, Invest in 
 Share 
 Dividend complementary
 the business repurchases M&A Maintain strong balance sheet Long-term objective of maintaining investment grade 15 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 1 2 3 4 Opportunistic, Invest in Share Dividend complementary the business repurchases M&A Maintain strong balance sheet Long-term objective of maintaining investment grade 15 Due to COVID-19, the Company has reduced its investment in the business and has suspended its dividend and share repurchase program.


2H 2020 Outlook & Initiatives 162H 2020 Outlook & Initiatives 16


2H 2020 Outlook Expect COVID-19 crisis to • continue to impact our business Planning business • conservatively and are prepared to chase any demand upside as it unfolds Expect customers to begin • holiday shopping earlier this year and we will meet their needs accordingly 172H 2020 Outlook Expect COVID-19 crisis to • continue to impact our business Planning business • conservatively and are prepared to chase any demand upside as it unfolds Expect customers to begin • holiday shopping earlier this year and we will meet their needs accordingly 17


2H 2020 Initiatives Excited to bring newness to Kohl’s is positioned to capture Compelling holiday assortment, customers through the launch share over holiday period emphasizing Home, Active, of Lands’ End and TOMS Cozy and Comfort, and Toys 182H 2020 Initiatives Excited to bring newness to Kohl’s is positioned to capture Compelling holiday assortment, customers through the launch share over holiday period emphasizing Home, Active, of Lands’ End and TOMS Cozy and Comfort, and Toys 18


Appendix 19Appendix 19


Reconciliations Adjusted Net (Loss) Income and Diluted (Loss) Earnings per Share, Non-GAAP Financial Measures (Unaudited) Three Months Ended Six Months Ended (Dollars in Millions, Except per Share Data) Aug 1, 2020 Aug 3, 2019 Aug 1, 2020 Aug 3, 2019 Net Income (Loss) • GAAP $ 47 $ 241 $ (494) $ 303 • Impairments, store closing, and other (2) 7 64 56 • (Gain) on sale of real estate (127) — (127) — • Income tax impact on items noted above 43 (1) 23 (14) • Adjusted (non-GAAP) $ (39) $ 247 $ (534) $ 345 Diluted (Loss) Earnings per Share • (1) GAAP $ 0.30 $ 1.51 $ (3.21) $ 1.89 • Impairments, store closing, and other (0.01) 0.05 0.41 0.35 • (Gain) on sale of real estate (0.82) — (0.82) — • Income tax impact on items noted above 0.28 (0.01) 0.15 (0.09) • (2) Adjusted (non-GAAP) $ (0.25) $ 1.55 $ (3.47) $ 2.15 (1) - Weighted average diluted shares outstanding for purpose of calculating diluted earnings per share for the three months ended August 1, 2020 was 155 million, which includes the dilutive effect of shares-based awards as determined under the treasury stock method. (2) - Weighted average diluted shares outstanding for purposes of calculating diluted adjusted (loss) earnings per share for the three months ended August 1, 2020 was 154 million as the effect of including dilutive shares would be antidilutive. 20 20Reconciliations Adjusted Net (Loss) Income and Diluted (Loss) Earnings per Share, Non-GAAP Financial Measures (Unaudited) Three Months Ended Six Months Ended (Dollars in Millions, Except per Share Data) Aug 1, 2020 Aug 3, 2019 Aug 1, 2020 Aug 3, 2019 Net Income (Loss) • GAAP $ 47 $ 241 $ (494) $ 303 • Impairments, store closing, and other (2) 7 64 56 • (Gain) on sale of real estate (127) — (127) — • Income tax impact on items noted above 43 (1) 23 (14) • Adjusted (non-GAAP) $ (39) $ 247 $ (534) $ 345 Diluted (Loss) Earnings per Share • (1) GAAP $ 0.30 $ 1.51 $ (3.21) $ 1.89 • Impairments, store closing, and other (0.01) 0.05 0.41 0.35 • (Gain) on sale of real estate (0.82) — (0.82) — • Income tax impact on items noted above 0.28 (0.01) 0.15 (0.09) • (2) Adjusted (non-GAAP) $ (0.25) $ 1.55 $ (3.47) $ 2.15 (1) - Weighted average diluted shares outstanding for purpose of calculating diluted earnings per share for the three months ended August 1, 2020 was 155 million, which includes the dilutive effect of shares-based awards as determined under the treasury stock method. (2) - Weighted average diluted shares outstanding for purposes of calculating diluted adjusted (loss) earnings per share for the three months ended August 1, 2020 was 154 million as the effect of including dilutive shares would be antidilutive. 20 20


Reconciliations Adjusted EBITDA August 1, 2020 (Dollars in Millions) Three Months Ended Operating Income $ 118 Depreciation and Amortization 219 EBITDA 337 Impairments, store closing, and other costs (2) (Gain) on sale of real estate (127) Adjusted EBITDA $ 208 21 21Reconciliations Adjusted EBITDA August 1, 2020 (Dollars in Millions) Three Months Ended Operating Income $ 118 Depreciation and Amortization 219 EBITDA 337 Impairments, store closing, and other costs (2) (Gain) on sale of real estate (127) Adjusted EBITDA $ 208 21 21


Reconciliations Free Cash Flow August 1, 2020 (Dollars in Millions) Three Months Ended Six Months Ended Net cash provided by operating activities $ 251 $ 304 Acquisition of property and equipment (34) (196) Finance lease and financing obligation payments (21) (44) Proceeds from financing obligations 0 3 Free Cash Flow $ 196 $ 67 22 22Reconciliations Free Cash Flow August 1, 2020 (Dollars in Millions) Three Months Ended Six Months Ended Net cash provided by operating activities $ 251 $ 304 Acquisition of property and equipment (34) (196) Finance lease and financing obligation payments (21) (44) Proceeds from financing obligations 0 3 Free Cash Flow $ 196 $ 67 22 22