8-K
KOHLS Corp false 0000885639 0000885639 2020-11-17 2020-11-17

 

 

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): November 17, 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 November 17, 2020, Kohl’s Corporation issued a press release reporting its earnings for the quarter ended October 31, 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 November 17, 2020
99.2    Presentation Materials for November 17, 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: November 17, 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 Reports Third Quarter Fiscal 2020 Financial Results

 

   

Third quarter sales and earnings exceed company expectations, with significant improvement from the second quarter

 

   

Strengthened financial position during the quarter by fully repaying revolver and ending with $1.9 billion in cash

 

   

Strong operating cash flow year-to-date of $910 million

 

   

Third quarter comparable sales decrease 13.3%

 

   

Third quarter loss per share of ($0.08); adjusted diluted earnings per share(2) of $0.01

MENOMONEE FALLS, Wis.—(BUSINESS WIRE)—November 17, 2020— Kohl’s Corporation (NYSE:KSS) today reported results for the quarter ended October 31, 2020.

 

     Three Months     Nine Months  

($ in millions, except per share data)

   2020     2019     Change     2020     2019     Change  

Total revenue

   $ 3,979     $ 4,625       (14.0 )%    $ 9,814     $ 13,142       (25.3 %) 

Net sales(1)

     (13.3 )%      (0.3 )%        (25.9 )%      (2.2 )%   

Gross margin

     35.8     36.3     (48 ) bps      30.5     37.3     (680 ) bps 

Selling, general, and administrative expenses

   $ 1,302     $ 1,419       (8.2 )%    $ 3,418     $ 3,962       (13.7 %) 

Reported

            

Net income (loss)

   $ (12   $ 123       (110 )%    $ (506   $ 426       (219 )% 

Diluted earnings (loss) per share

   $ (0.08   $ 0.78       (110 )%    $ (3.28   $ 2.67       (223 )% 

Non-GAAP(2)

            

Adjusted net income (loss)

   $ 2     $ 116       (98 )%    $ (532   $ 460       (216 )% 

Adjusted diluted earnings (loss) per share

   $ 0.01     $ 0.74       (99 )%    $ (3.45   $ 2.89       (219 )% 

 

(1)

Represents change in Net sales vs. prior year period.

(2)

Excludes Impairments, store closing, and other costs, (Gain) on sale of real estate, and (Gain) loss on extinguishment of debt.

“I continue to be very proud of how our organization is navigating through the COVID-19 pandemic. Our third quarter results exceeded our expectations with significant sequential sales and profitability improvement. Digital sales growth remained strong and our actions to improve our gross margin showed great progress. We also further strengthened our financial position and fully repaid our revolver during the period, which underscores the solid cash flow generation of our business,” said Michelle Gass, Kohl’s chief executive officer.

“We entered the holiday season well-positioned and prepared to serve our customers with more omnichannel conveniences in place to deliver the great experience they always expect from Kohl’s. As we look ahead, we are incredibly focused on executing against our new strategic framework, which represents our greatest opportunity to drive long-term sales and profit growth and create shareholder value in the coming years,” said Gass. “In addition, through disciplined capital management we plan to reinstate a dividend during the first half of 2021.”

Third Quarter 2020 Earnings Conference Call

Kohl’s will host its quarterly earnings conference call at 9:00 am ET on November 17, 2020. A webcast of the conference call and the related presentation materials will be available via the Company’s web site at investors.kohls.com, 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

KSS-IR


KOHL’S CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 

     Three Months Ended     Nine Months Ended  

(Dollars in Millions, Except per Share Data)

   October 31,
2020
    November 2,
2019
    October 31,
2020
    November 2,
2019
 

Net sales

   $ 3,779     $ 4,358     $ 9,152     $ 12,348  

Other revenue

     200       267       662       794  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total revenue

     3,979       4,625       9,814       13,142  

Cost of merchandise sold

     2,424       2,775       6,360       7,740  

Gross margin rate

     35.8     36.3     30.5     37.3

Operating expenses:

        

Selling, general, and administrative

     1,302       1,419       3,418       3,962  

As a percent of total revenue

     32.7     30.7     34.8     30.1

Depreciation and amortization

     210       227       656       687  

Impairments, store closing, and other

     21       —         85       55  

(Gain) on sale of real estate

     —         —         (127     —    
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating income (loss)

     22       204       (578     698  

Interest expense, net

     78       52       214       157  

(Gain) loss on extinguishment of debt

     —         (9     —         (9
  

 

 

   

 

 

   

 

 

   

 

 

 

(Loss) income before income taxes

     (56     161       (792     550  

(Benefit) provision for income taxes

     (44     38       (286     124  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net (loss) income

   $ (12   $ 123     $ (506   $ 426  
  

 

 

   

 

 

   

 

 

   

 

 

 

Average number of shares:

        

Basic

     154       156       154       158  

Diluted

     154       157       154       159  

(Loss) earnings per share:

        

Basic

   $ (0.08   $ 0.79     $ (3.28   $ 2.69  

Diluted

   $ (0.08   $ 0.78     $ (3.28   $ 2.67  
  

 

 

   

 

 

   

 

 

   

 

 

 

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

(Unaudited)

 

     Three Months Ended     Nine Months Ended  

(Dollars in Millions, Except per Share Data)

   October 31,
2020
    November 2,
2019
    October 31,
2020
    November 2,
2019
 

Net (loss) income

        

GAAP

   $ (12   $ 123     $ (506   $ 426  

Impairments, store closing, and other

     21       —         85       55  

(Gain) on sale of real estate

     —         —         (127     —    

(Gain) loss on extinguishment of debt

     —         (9     —         (9

Income tax impact of items noted above

     (7     2       16       (12
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted (non-GAAP)

   $ 2     $ 116     $ (532   $ 460  
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted (loss) earnings per share

        

GAAP(1)

   $ (0.08   $ 0.78     $ (3.28   $ 2.67  

Impairments, store closing, and other

     0.14       —         0.55       0.35  

(Gain) on sale of real estate

     —         —         (0.82     —    

(Gain) loss on extinguishment of debt

     —         (0.06     —         (0.06

Income tax impact of items noted above

     (0.05     0.02       0.10       (0.07
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted (non-GAAP)(2)

   $ 0.01     $ 0.74     $ (3.45   $ 2.89  
  

 

 

   

 

 

   

 

 

   

 

 

 

 

(1)

Weighted average diluted shares outstanding for purposes of calculating diluted adjusted (loss) earnings per share for the three months ended October 31, 2020 was 154 million as the effect of including dilutive shares would be antidilutive.

(2)

Weighted average diluted shares outstanding for purpose of calculating diluted earnings per share for the three months ended October 31, 2020 was 155 million, which includes the dilutive effect of share-based awards as determined under the treasury stock method.


KOHL’S CORPORATION

CONSOLIDATED BALANCE SHEETS

(Unaudited)

 

(Dollars in Millions)

   October 31,
2020
     November 2,
2019
 

Assets

     

Current assets:

     

Cash and cash equivalents

   $ 1,939      $ 490  

Merchandise inventories

     3,607        4,887  

Income tax receivable

     115        25  

Other

     335        379  
  

 

 

    

 

 

 

Total current assets

     5,996        5,781  

Property and equipment, net

     6,876        7,364  

Operating leases

     2,422        2,427  

Other assets

     150        167  
  

 

 

    

 

 

 

Total assets

   $ 15,444      $ 15,739  
  

 

 

    

 

 

 

Liabilities and Shareholders’ Equity

     

Current liabilities:

     

Accounts payable

   $ 2,184      $ 2,454  

Accrued liabilities

     1,272        1,347  

Income taxes payable

     —          2  

Current portion of:

     

Finance leases and financing obligations

     127        110  

Operating leases

     160        162  
  

 

 

    

 

 

 

Total current liabilities

     3,743        4,075  

Long-term debt

     2,450        1,856  

Finance leases and financing obligations

     1,402        1,332  

Operating leases

     2,644        2,643  

Deferred income taxes

     74        258  

Other long-term liabilities

     293        220  

Shareholders’ equity

     4,838        5,355  
  

 

 

    

 

 

 

Total liabilities and shareholders’ equity

   $ 15,444      $ 15,739  
  

 

 

    

 

 

 


KOHL’S CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

     Nine Months Ended  

(Dollars in Millions)

   October 31,
2020
    November 2,
2019
 

Operating activities

    

Net (loss) income

   $ (506   $ 426  

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

    

Depreciation and amortization

     656       687  

Share-based compensation

     26       47  

Deferred income tax (benefit) expense

     (181     45  

Impairments, store closing, and other costs

     49       45  

(Gain) loss on extinguishment of debt

     —         (9

(Gain) on sale of real estate

     (127     —    

Non-cash inventory costs

     187       —    

Non-cash lease expense

     111       112  

Other non-cash expense (income)

     15       (3

Changes in operating assets and liabilities:

    

Merchandise inventories

     (251     (1,405

Other current and long-term assets

     54       34  

Accounts payable

     978       1,266  

Accrued and other long-term liabilities

     159       (26

Income taxes

     (147     (49

Operating lease liabilities

     (113     (125
  

 

 

   

 

 

 

Net cash provided by operating activities

     910       1,045  
  

 

 

   

 

 

 

Investing activities

    

Acquisition of property and equipment

     (264     (678

Proceeds from sale of real estate

     194       —    

Other

     —         8  
  

 

 

   

 

 

 

Net cash used in investing activities

     (70     (670
  

 

 

   

 

 

 

Financing activities

    

Proceeds from issuance of debt

     2,097       —    

Deferred financing costs

     (19     —    

Treasury stock purchases

     (8     (387

Shares withheld for taxes on vested restricted shares

     (21     (32

Dividends paid

     (108     (319

Reduction of long-term borrowings

     (1,497     (6

Finance lease and financing obligation payments

     (72     (88

Proceeds from stock option exercises

     —         2  

Proceeds from financing obligations

     4       11  
  

 

 

   

 

 

 

Net cash provided by (used in) financing activities

     376       (819
  

 

 

   

 

 

 

Net increase (decrease) in cash and cash equivalents

     1,216       (444

Cash and cash equivalents at beginning of period

     723       934  
  

 

 

   

 

 

 

Cash and cash equivalents at end of period

   $ 1,939     $ 490  
  

 

 

   

 

 

 
EX-99.2

Exhibit 99.2 Q3 2020 Results Presentation November 17, 2020Exhibit 99.2 Q3 2020 Results Presentation November 17, 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. 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 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 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 short and long-term impact of COVID-19 on the economy and the pace of recovery thereafter.  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. 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 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 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 short and long-term impact of COVID-19 on the economy and the pace of recovery thereafter. 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


Q3 2020 10 Driving Top Line Growth Results 
 COVID-19 Update 4 Presentation Q3 2020 Results 8 Q4 2020 Outlook 13 Our Strategy 15 3Q3 2020 10 Driving Top Line Growth Results COVID-19 Update 4 Presentation Q3 2020 Results 8 Q4 2020 Outlook 13 Our Strategy 15 3


COVID-19 Update 4COVID-19 Update 4


We established two priorities in response to the COVID-19 crisis Protecting 
 Preserving 
 the health and 
 our financial 
 safety of our 
 position + associates 
 5 and customers 5We established two priorities in response to the COVID-19 crisis Protecting Preserving the health and our financial safety of our position + associates 5 and customers 5


Protecting Associates And Customers Continue to prioritize the health and safety of Kohl’s customers and associates • We received an “A” grade from ShopSafely, an organization that scores retailers 
 • on the safety of their shopping experience during the COVID-19  pandemic Strong customer satisfaction with our new safety and cleanliness procedures • Enhanced Safety Measures Continue During the Holiday Period Stores Made significant enhancements to the store environment and operations
 Limited store hours
 • Social distancing measures (e.g., installed checkout plexiglass, widened store aisles, • closed 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 
 Store Drive Up provides limited contact customer pickup capability
 • Additional precautions put in place to ensure store cleanliness and to support social distancing during holiday period (e.g. stanchions and associate greeters) Fulfillment Centers Enhanced procedures in fulfillment centers
 Additional plexi-barriers in all break rooms, bathrooms, and training/orientation rooms
 • Associate wellness checks, safety training, and the required use of masks for associates
 • 6Protecting Associates And Customers Continue to prioritize the health and safety of Kohl’s customers and associates • We received an “A” grade from ShopSafely, an organization that scores retailers • on the safety of their shopping experience during the COVID-19 pandemic Strong customer satisfaction with our new safety and cleanliness procedures • Enhanced Safety Measures Continue During the Holiday Period Stores Made significant enhancements to the store environment and operations Limited store hours • Social distancing measures (e.g., installed checkout plexiglass, widened store aisles, • closed 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 Store Drive Up provides limited contact customer pickup capability • Additional precautions put in place to ensure store cleanliness and to support social distancing during holiday period (e.g. stanchions and associate greeters) Fulfillment Centers Enhanced procedures in fulfillment centers Additional plexi-barriers in all break rooms, bathrooms, and training/orientation rooms • Associate wellness checks, safety training, and the required use of masks for associates • 6


Preserving Financial Position Net Sales declined 13% in Q3 2020, yet showed significant 
 • sequential improvement from Q2 2020 Efforts to improve gross margin showed great progress 
 • Operating in Q3 2020 Performance SG&A expense declined 8% in Q3 2020 • Inventory reduced 26% in Q3 2020 • Strengthened financial position with cash of $1.9 billion at • end of quarter Fully paid off $1 billion revolver balance in Q3 2020 • Financial Liquidity Strong operating cash flow year-to-date of $910 million • Reduced capital expenditures by 61% year-to-date 2020 • Plan to reinstate a dividend in the first half of 2021 • 7 7 7 Preserving Financial Position Net Sales declined 13% in Q3 2020, yet showed significant • sequential improvement from Q2 2020 Efforts to improve gross margin showed great progress • Operating in Q3 2020 Performance SG&A expense declined 8% in Q3 2020 • Inventory reduced 26% in Q3 2020 • Strengthened financial position with cash of $1.9 billion at • end of quarter Fully paid off $1 billion revolver balance in Q3 2020 • Financial Liquidity Strong operating cash flow year-to-date of $910 million • Reduced capital expenditures by 61% year-to-date 2020 • Plan to reinstate a dividend in the first half of 2021 • 7 7 7


Q3 2020 Results 8 Q3 2020 Results 8


Q3 2020 Results Key Takeaways • Q3 2020 sales and earnings exceed company expectations, with significant improvement from Q2 • Digital sales growth remained strong  • Our actions to improve gross margin showed great progress • Disciplined management of expenses and inventory resulted in positive 
 (1) operating and free cash flow • Strengthened financial position during the quarter by fully repaying revolver 
 and ending with $1.9 billion in cash • Plan to reinstate a dividend in the first half of 2021 Q3 2020 Results • Net sales declined 13%, with digital sales +25% as compared to last year • Gross margin contracted 48 basis points with inventory management and 
 reduced promotional activity, offset by increased shipping costs • SG&A expense declined 8% in Q3, and declined 10% excluding 
 COVID-19 expenses (1) • Adjusted EBITDA of $253 million in Q3 2020 (1) • Adjusted EPS $0.01 vs $0.74 in prior year • Inventory declined 26% versus prior year • Strong operating cash flow year-to-date of $910 million 9 (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. 9Q3 2020 Results Key Takeaways • Q3 2020 sales and earnings exceed company expectations, with significant improvement from Q2 • Digital sales growth remained strong • Our actions to improve gross margin showed great progress • Disciplined management of expenses and inventory resulted in positive (1) operating and free cash flow • Strengthened financial position during the quarter by fully repaying revolver and ending with $1.9 billion in cash • Plan to reinstate a dividend in the first half of 2021 Q3 2020 Results • Net sales declined 13%, with digital sales +25% as compared to last year • Gross margin contracted 48 basis points with inventory management and reduced promotional activity, offset by increased shipping costs • SG&A expense declined 8% in Q3, and declined 10% excluding COVID-19 expenses (1) • Adjusted EBITDA of $253 million in Q3 2020 (1) • Adjusted EPS $0.01 vs $0.74 in prior year • Inventory declined 26% versus prior year • Strong operating cash flow year-to-date of $910 million 9 (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. 9


Q3 2020 Key Metrics Consolidated Statement of Operations Three Months Ended (Dollars in Millions) October 31, 2020 November 2, 2019 Net Sales $ 3,779 $ 4,358 Total Revenue 3,979 4,625 Gross Margin Rate 35.8% 36.3% SG&A 1,302 1,419 Depreciation 210 227 Impairments, Store Closings, and Other Costs 21 0 Operating Income $ 22 $ 204 Interest Expense 78 52 (Gain) on extinguishment of debt 0 (9) Provision for Income Taxes (44) 38 Net Income $ (12) $ 123 Diluted EPS ($0.08) $0.78 (1) $ 2 $ 116 Adjusted Net Income (Non-GAAP) (1) $0.01 $0.74 Adjusted Diluted EPS (Non-GAAP) Key Balance Sheet Items October 31, 2020 November 2, 2019 (Dollars in Millions) Cash and Cash Equivalents $ 1,939 $ 490 Merchandise Inventories 3,607 4,887 Accounts Payable 2,184 2,454 Long-term Debt 2,450 1,856 Key Cash Flow items October 31, 2020 (Dollars in Millions) Three Months Ended Nine Months Ended Operating Cash Flow $ 606 $ 910 Capital Expenditures (68) (264) Net, Finance lease and financing obligations (27) (68) (1) $ 511 $ 578 Free Cash Flow 10 10 (1) - Adjusted Net Income, Adjusted EPS, and Free Cash Flow are non-GAAP financial measures. Please refer to the reconciliation included in the Appendix for more information. 10Q3 2020 Key Metrics Consolidated Statement of Operations Three Months Ended (Dollars in Millions) October 31, 2020 November 2, 2019 Net Sales $ 3,779 $ 4,358 Total Revenue 3,979 4,625 Gross Margin Rate 35.8% 36.3% SG&A 1,302 1,419 Depreciation 210 227 Impairments, Store Closings, and Other Costs 21 0 Operating Income $ 22 $ 204 Interest Expense 78 52 (Gain) on extinguishment of debt 0 (9) Provision for Income Taxes (44) 38 Net Income $ (12) $ 123 Diluted EPS ($0.08) $0.78 (1) $ 2 $ 116 Adjusted Net Income (Non-GAAP) (1) $0.01 $0.74 Adjusted Diluted EPS (Non-GAAP) Key Balance Sheet Items October 31, 2020 November 2, 2019 (Dollars in Millions) Cash and Cash Equivalents $ 1,939 $ 490 Merchandise Inventories 3,607 4,887 Accounts Payable 2,184 2,454 Long-term Debt 2,450 1,856 Key Cash Flow items October 31, 2020 (Dollars in Millions) Three Months Ended Nine Months Ended Operating Cash Flow $ 606 $ 910 Capital Expenditures (68) (264) Net, Finance lease and financing obligations (27) (68) (1) $ 511 $ 578 Free Cash Flow 10 10 (1) - Adjusted Net Income, Adjusted EPS, and Free Cash Flow are non-GAAP financial measures. Please refer to the reconciliation included in the Appendix for more information. 10


YTD 2020 Gross Margin Performance Actions to improve gross margin showed great progress in Q3 2020 • Cost of shipping pressure in 2020 driven by increased digital sales penetration accelerated by the pandemic • Q1 Q2 Q3 17.3% 33.1% 35.8% % Change Y/Y (48) bps Cost of Shipping Inventory Management (569) bps Pricing / Promos Mix / Promos Cost of Shipping (1,950) bps 11 Inventory Actions Cost of Shipping Mix / Other 11 YTD 2020 Gross Margin Performance Actions to improve gross margin showed great progress in Q3 2020 • Cost of shipping pressure in 2020 driven by increased digital sales penetration accelerated by the pandemic • Q1 Q2 Q3 17.3% 33.1% 35.8% % Change Y/Y (48) bps Cost of Shipping Inventory Management (569) bps Pricing / Promos Mix / Promos Cost of Shipping (1,950) bps 11 Inventory Actions Cost of Shipping Mix / Other 11


Enhanced Liquidity Position Key Balance Sheet & Cash Flow Items: Q3 / YTD 2020 February 1, 2020 Beginning Cash $723M Key Takeaways Sources • Long history of disciplined and prudent 
 capital management New Debt $600M • More than two decades of maintaining 
 Operating Cash Flow $910M Investment Grade rating Sales-leaseback $193M • Effectively navigating through the crisis and 
 further strengthened liquidity position in Q3 2020 Uses • Well-positioned to capitalize on evolving customer Capex ($264M) behaviors and the retail industry disruption
 Dividend ($108M) Share Repurchase ($8M) October 31, 2020 Ending Cash $1,939M 12 Enhanced Liquidity Position Key Balance Sheet & Cash Flow Items: Q3 / YTD 2020 February 1, 2020 Beginning Cash $723M Key Takeaways Sources • Long history of disciplined and prudent capital management New Debt $600M • More than two decades of maintaining Operating Cash Flow $910M Investment Grade rating Sales-leaseback $193M • Effectively navigating through the crisis and further strengthened liquidity position in Q3 2020 Uses • Well-positioned to capitalize on evolving customer Capex ($264M) behaviors and the retail industry disruption Dividend ($108M) Share Repurchase ($8M) October 31, 2020 Ending Cash $1,939M 12


Q4 2020 Outlook 13 Q4 2020 Outlook 13


Q4 2020 Outlook • Customers look to Kohl’s for their holiday shopping needs and we 
 will once again deliver the great experience they expect  • Well-positioned and prepared to serve our customers with more omni-channel experiences in place • Stores ready for the holiday season with additional health and safety measures in place • Compelling holiday assortment, emphasizing Active, Home, Cozy and Comfort, and Toys 14Q4 2020 Outlook • Customers look to Kohl’s for their holiday shopping needs and we will once again deliver the great experience they expect • Well-positioned and prepared to serve our customers with more omni-channel experiences in place • Stores ready for the holiday season with additional health and safety measures in place • Compelling holiday assortment, emphasizing Active, Home, Cozy and Comfort, and Toys 14


Our Strategy 15 Our Strategy 15


Our Strategy The most trusted retailer of choice for the active and casual lifestyle Expand Disciplined Strong Operating Capital Organizational Margin Management Core Drive Top Line Growth Destination for Differentiated Agile, Active & Casual Leading with Omni-channel Operating Margin Maintain Strong Accountable & Lifestyle Loyalty & Value Experience Goal of 7% to 8% Balance Sheet Inclusive Culture Expand Active and Outdoor Best-in-class loyalty Healthy store base in End-to-end supply chain Sustain Investment Grade Innovative and adaptive • • • • • • evolving landscape transformation rating learning approach Reignite growth in Women’s Drive productivity • • through deeper Modernize the store SG&A efficiency through Solid cash flow Focused on diversity • • • • Build a sizable Beauty • engagement experience store labor, marketing, generation and inclusion business and technology Deliver personalized Continue digital growth Committed to returning ESG stewardship • • • • Drive category productivity • experiences Operational excellence capital to shareholders • and inventory turn Further enhance omni- • channel capabilities Capture market share from • retail industry disruption Creating Long-term Shareholder Value Expand operating margin Return to growth Solid cash flow generation Return capital to shareholders Maintain strong balance sheet 16Our Strategy The most trusted retailer of choice for the active and casual lifestyle Expand Disciplined Strong Operating Capital Organizational Margin Management Core Drive Top Line Growth Destination for Differentiated Agile, Active & Casual Leading with Omni-channel Operating Margin Maintain Strong Accountable & Lifestyle Loyalty & Value Experience Goal of 7% to 8% Balance Sheet Inclusive Culture Expand Active and Outdoor Best-in-class loyalty Healthy store base in End-to-end supply chain Sustain Investment Grade Innovative and adaptive • • • • • • evolving landscape transformation rating learning approach Reignite growth in Women’s Drive productivity • • through deeper Modernize the store SG&A efficiency through Solid cash flow Focused on diversity • • • • Build a sizable Beauty • engagement experience store labor, marketing, generation and inclusion business and technology Deliver personalized Continue digital growth Committed to returning ESG stewardship • • • • Drive category productivity • experiences Operational excellence capital to shareholders • and inventory turn Further enhance omni- • channel capabilities Capture market share from • retail industry disruption Creating Long-term Shareholder Value Expand operating margin Return to growth Solid cash flow generation Return capital to shareholders Maintain strong balance sheet 16


Kohl’s has a powerful foundation to accelerate growth Active Customers 65M Loyalty Members 30M Kohl’s Charge Card holders 29M Kohl’s App Users 16M Of Americans living within 15 miles of a Kohl’s store 80% Nationwide base of convenient store locations 1,162 Store visits 600M Digital sales penetration 24% Website visits per year 1.5B Accessible and aspirational brand portfolio Figures based on 2019 results. Stores as of October 31, 2020. 17Kohl’s has a powerful foundation to accelerate growth Active Customers 65M Loyalty Members 30M Kohl’s Charge Card holders 29M Kohl’s App Users 16M Of Americans living within 15 miles of a Kohl’s store 80% Nationwide base of convenient store locations 1,162 Store visits 600M Digital sales penetration 24% Website visits per year 1.5B Accessible and aspirational brand portfolio Figures based on 2019 results. Stores as of October 31, 2020. 17


We are uniquely positioned to be the retailer of choice for the active and casual lifestyle For the entire family Accessible and Omni-channel ease Positioned for growth aspirational brand We serve the entire family We have a best-in-class omni- We’re focusing on growth across a breadth of categories: portfolio channel platform reaching 65 categories, and our flexible Women’s, Men’s, Kids, Home, million customers nationwide store and digital assets allow We offer an unmatched brand and Beauty us to continue to evolve with portfolio that is accessible and the customer aspirational to families every day 18 We are uniquely positioned to be the retailer of choice for the active and casual lifestyle For the entire family Accessible and Omni-channel ease Positioned for growth aspirational brand We serve the entire family We have a best-in-class omni- We’re focusing on growth across a breadth of categories: portfolio channel platform reaching 65 categories, and our flexible Women’s, Men’s, Kids, Home, million customers nationwide store and digital assets allow We offer an unmatched brand and Beauty us to continue to evolve with portfolio that is accessible and the customer aspirational to families every day 18


We are building on areas with proven momentum Active Beauty Digital Innovation • We’re already a major player in • Our recent focus is gaining • We’ve continued to innovate • Leveraging our store footprint Active as a top retailer of Nike, traction and our customers are and enhance the customer (e.g. Amazon Returns) Under Armour, and Adidas responding experience • Using our omni-channel • Sales nearly doubled since • Sales increased nearly 40% platform to bring discovery to Digital sales grew more than • 2013 to 20% of our business over the past 5 years our customers 100% over the past 5 years to (e.g. Curated by Kohl’s) $4.5 billion • Constantly testing and implementing new ideas to better serve the customer (e.g. Store Drive Up) Figures based on 2019 results 19We are building on areas with proven momentum Active Beauty Digital Innovation • We’re already a major player in • Our recent focus is gaining • We’ve continued to innovate • Leveraging our store footprint Active as a top retailer of Nike, traction and our customers are and enhance the customer (e.g. Amazon Returns) Under Armour, and Adidas responding experience • Using our omni-channel • Sales nearly doubled since • Sales increased nearly 40% platform to bring discovery to Digital sales grew more than • 2013 to 20% of our business over the past 5 years our customers 100% over the past 5 years to (e.g. Curated by Kohl’s) $4.5 billion • Constantly testing and implementing new ideas to better serve the customer (e.g. Store Drive Up) Figures based on 2019 results 19


Balanced Capital Allocation Strategy Committed to returning capital to shareholders Maintain strong balance sheet Long-term objective of maintaining Investment Grade rating 1 2 3 4 Opportunistic, Invest in 
 Share 
 Dividend complementary
 the business repurchases M&A Plan to reinstate a dividend in 1H 2021 20Balanced Capital Allocation Strategy Committed to returning capital to shareholders Maintain strong balance sheet Long-term objective of maintaining Investment Grade rating 1 2 3 4 Opportunistic, Invest in Share Dividend complementary the business repurchases M&A Plan to reinstate a dividend in 1H 2021 20


We have a history of investing in our business and returning significant capital to shareholders Significant Capital Returned (1) Capex ($ in millions) Solid Free Cash Flow ($ in millions) to Shareholders ($ in millions) Dividend Share Repurchase $893 $796 $674 $470 $396 $1,403 $855 $306 $672 $578 $881 $700 $423 $400 $368 2017 2018 2019 2017 2018 2019 2017 2018 2019 • Remain committed to investing in the • Focused on driving free cash flow • Committed to long-term capital return business program and plan to reinstate dividend in • $3.0 billion cumulative free cash flow 2021 • More than $2.0 billion cumulative Capex generated from 2017 through 2019 during 2017-2019, of which ~70% • $2.4 billion cumulative capital returned supported our omni-channel strategy to shareholders during 2017-2019 through dividend and share repurchases • Reduced debt by over $940 million in 2018-2019 and will focus on reducing leverage through liability management as the environment stabilizes (1) - Free Cash Flow is a non-GAAP financial measure. Please refer to the reconciliation included in the Appendix for more information. 21 We have a history of investing in our business and returning significant capital to shareholders Significant Capital Returned (1) Capex ($ in millions) Solid Free Cash Flow ($ in millions) to Shareholders ($ in millions) Dividend Share Repurchase $893 $796 $674 $470 $396 $1,403 $855 $306 $672 $578 $881 $700 $423 $400 $368 2017 2018 2019 2017 2018 2019 2017 2018 2019 • Remain committed to investing in the • Focused on driving free cash flow • Committed to long-term capital return business program and plan to reinstate dividend in • $3.0 billion cumulative free cash flow 2021 • More than $2.0 billion cumulative Capex generated from 2017 through 2019 during 2017-2019, of which ~70% • $2.4 billion cumulative capital returned supported our omni-channel strategy to shareholders during 2017-2019 through dividend and share repurchases • Reduced debt by over $940 million in 2018-2019 and will focus on reducing leverage through liability management as the environment stabilizes (1) - Free Cash Flow is a non-GAAP financial measure. Please refer to the reconciliation included in the Appendix for more information. 21


Strategic Progress to Date: Driving Top Line Growth The most trusted retailer of choice for the active and casual lifestyle Destination for Active & 
 Leading with Loyalty & Value Differentiated Omnichannel Casual Lifestyle Experience Expand Active & Outdoor Value Omnichannel Expand Active space by nearly 20% in 2021
 Took targeted actions to simplify pricing and 
 Continue to prioritize safety standards
 • • • promotional strategies
 Launching FLX, our new athleisure brand in 2021
 Simplify shopping experience by opening up aisles
 • • Efforts benefited Q3 2020 gross margin • Expanded Curated by Kohl’s to 300 stores
 • Lands’ End off to a good start, expanding to 300 stores in 2021
 • Piloting Wellness Market in 50 stores and online
 • Best-In-Class Loyalty Reignite Women’s Growth Enhanced digital site experience
 • Launched Kohl’s Rewards in September 2020
 • Positive Q3 sales growth in athleisure, lounge, and sleepwear 
 • Customer adoption of Store Drive Up continues
 • Positive performance since launch with significant growth 
 • Continuing brand edits: exiting Chaps and Apt. 9 (in Women’s)
 • in sign-ups and higher redemption rates
 • Reducing choice counts and increasing depth in Q4 2020
 Build a Sizeable Beauty Business Expanded elevated beauty pilot to 62 stores in Q4 2020
 • Drive Category Productivity Streamlining fine jewelry and dress apparel • 22 Strategic Progress to Date: Driving Top Line Growth The most trusted retailer of choice for the active and casual lifestyle Destination for Active & Leading with Loyalty & Value Differentiated Omnichannel Casual Lifestyle Experience Expand Active & Outdoor Value Omnichannel Expand Active space by nearly 20% in 2021 Took targeted actions to simplify pricing and Continue to prioritize safety standards • • • promotional strategies Launching FLX, our new athleisure brand in 2021 Simplify shopping experience by opening up aisles • • Efforts benefited Q3 2020 gross margin • Expanded Curated by Kohl’s to 300 stores • Lands’ End off to a good start, expanding to 300 stores in 2021 • Piloting Wellness Market in 50 stores and online • Best-In-Class Loyalty Reignite Women’s Growth Enhanced digital site experience • Launched Kohl’s Rewards in September 2020 • Positive Q3 sales growth in athleisure, lounge, and sleepwear • Customer adoption of Store Drive Up continues • Positive performance since launch with significant growth • Continuing brand edits: exiting Chaps and Apt. 9 (in Women’s) • in sign-ups and higher redemption rates • Reducing choice counts and increasing depth in Q4 2020 Build a Sizeable Beauty Business Expanded elevated beauty pilot to 62 stores in Q4 2020 • Drive Category Productivity Streamlining fine jewelry and dress apparel • 22


Appendix 23Appendix 23


Reconciliations Adjusted Net (Loss) Income and Diluted (Loss) Earnings per Share, Non-GAAP Financial Measures (unaudited) Three Months Ended Nine Months Ended (Dollars in Millions, Except per Share Data) October 31, 2020 November 2, 2019 October 31, 2020 November 2, 2019 Net Income (Loss) GAAP $ (12) $ 123 $ (506) $ 426 Impairments, store closing, and other 21 0 85 55 (Gain) on sale of real estate 0 0 (127) 0 Gain on extinguishment of debt 0 (9) 0 (9) Income tax impact of items noted above (7) 2 16 (12) Adjusted (non-GAAP) $ 2 $ 116 $ (532) $ 460 Diluted (Loss) Earnings per Share GAAP(1) $ (0.08) $ 0.78 $ (3.28) $ 2.67 Impairments, store closing, and other 0.14 0.00 0.55 0.35 (Gain) on sale of real estate 0.00 0.00 (0.82) 0.00 Gain on extinguishment of debt 0.00 (0.06) 0.00 (0.06) Income tax impact of items noted above (0.05) 0.02 0.10 (0.07) Adjusted (non-GAAP)(2) $ 0.01 $ 0.74 $ (3.45) $ 2.89 (1) - Weighted average diluted shares outstanding for purposes of calculating diluted adjusted (loss) earnings per share for the three months ended October 31, 2020, 
 was 154 million as the effect of including dilutive shares would be anti-dilutive. 
 (2) - Weighted average diluted shares outstanding for purpose of calculating diluted earnings per share for the three months ended October 31, 2020 was 155 million 
 which includes the diluted effect of share-based awards as determined under the treasury stock method. 24 Reconciliations Adjusted Net (Loss) Income and Diluted (Loss) Earnings per Share, Non-GAAP Financial Measures (unaudited) Three Months Ended Nine Months Ended (Dollars in Millions, Except per Share Data) October 31, 2020 November 2, 2019 October 31, 2020 November 2, 2019 Net Income (Loss) GAAP $ (12) $ 123 $ (506) $ 426 Impairments, store closing, and other 21 0 85 55 (Gain) on sale of real estate 0 0 (127) 0 Gain on extinguishment of debt 0 (9) 0 (9) Income tax impact of items noted above (7) 2 16 (12) Adjusted (non-GAAP) $ 2 $ 116 $ (532) $ 460 Diluted (Loss) Earnings per Share GAAP(1) $ (0.08) $ 0.78 $ (3.28) $ 2.67 Impairments, store closing, and other 0.14 0.00 0.55 0.35 (Gain) on sale of real estate 0.00 0.00 (0.82) 0.00 Gain on extinguishment of debt 0.00 (0.06) 0.00 (0.06) Income tax impact of items noted above (0.05) 0.02 0.10 (0.07) Adjusted (non-GAAP)(2) $ 0.01 $ 0.74 $ (3.45) $ 2.89 (1) - Weighted average diluted shares outstanding for purposes of calculating diluted adjusted (loss) earnings per share for the three months ended October 31, 2020, was 154 million as the effect of including dilutive shares would be anti-dilutive. (2) - Weighted average diluted shares outstanding for purpose of calculating diluted earnings per share for the three months ended October 31, 2020 was 155 million which includes the diluted effect of share-based awards as determined under the treasury stock method. 24


Reconciliations October 31, 2020 Adjusted EBITDA Free Cash Flow Three Months Ended ($ in millions) October 31, 2020 ($ in millions) Three Months Ended Nine Months Ended Net cash provided by operating activities Operating Income 606 910 $ 22 Acquisition of property and equipment Depreciation and Amortization 210 (68) (264) Finance lease and financing obligation payments EBITDA 232 (28) (72) Impairments, store closing, and other Proceeds from financing obligations 21 1 4 (Gain) on sale of real estate $0 Free cash flow $511 $578 Adjusted EBITDA 253 25 Reconciliations October 31, 2020 Adjusted EBITDA Free Cash Flow Three Months Ended ($ in millions) October 31, 2020 ($ in millions) Three Months Ended Nine Months Ended Net cash provided by operating activities Operating Income 606 910 $ 22 Acquisition of property and equipment Depreciation and Amortization 210 (68) (264) Finance lease and financing obligation payments EBITDA 232 (28) (72) Impairments, store closing, and other Proceeds from financing obligations 21 1 4 (Gain) on sale of real estate $0 Free cash flow $511 $578 Adjusted EBITDA 253 25