Slide 1: Q3 2021 Results Presentation
Q3 2021 Results Presentation November 18, 2021
Slide 2: Cautionary Statement Regarding Forward-Looking Information
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
Slide 3: Q3 2021 Results Presentation Agenda
Q3 2021 Results Presentation Driving Top Line Growth 10 Q3 2021 Results 4 Updated 2021 Outlook 9 Our Strategy 11 3
Slide 4: Q3 2021 Results
Q3 2021 Results 4
Slide 5: Q3 2021 Results Key Takeaways
Q3 2021 Results Key Takeaways • Achieved record Q3 earnings as both sales and margins exceed expectations and raised full year sales and earnings guidance • Continued to execute against strategic plan, driving accelerated growth in Active sales and successfully launching several transformational bra
Slide 6: Q3 Key Metrics
Q3 Key Metrics Consolidated Statement of Operations Three Months Ended (Dollars in Millions) October 30, 2021 October 31, 2020 Net Sales $ 4,366 $ 3,779 Total Revenue 4,600 3,979 Gross Margin Rate 39.9% 35.8% SG&A 1,380 1,302 Depreciation 210 210 Impairments, Store Closings, and Other Costs — 21 Ope
Slide 7: Q3 2021 Gross Margin & SG&A Expense Performance
Q3 2021 Gross Margin & SG&A Expense Performance Gross Margin SG&A Expense Increased 408 bps versus Q3 2020 SG&A leveraged 273 bps versus Q3 2020 39.9% $1,380M 35.8% $1,302M % Total Revenue 32.7% 30.0% Q3 2020 Q3 2021 Q3 2020 Q3 2021 Q3 2021 Gross Margin Takeaways Q3 2021 SG&A Takeaways Tightly manag
Slide 8: Enhanced Liquidity Position
Enhanced Liquidity Position Key Balance Sheet & Cash Flow Items: YTD 2021 January 31, 2021 Beginning Cash $2,271M Key Takeaways Sources • Strong earnings performance and cash flow Operating Cash Flow $1,774M generation further improved leverage profile • Accelerated share repurchases, reinforcing ou
Slide 9: Updated 2021 Outlook
Updated 2021 Outlook 9
Slide 10: Updated 2021 Outlook
Updated 2021 Outlook Metric Full Year Guidance Mid twenties Net Sales percent increase versus 2020 From a low twenties percent increase Operating Margin 8.4% to 8.5% From 7.4% to 7.6% Adjusted EPS* $7.10 to $7.30 From $5.80 to $6.10 Capital Allocation Strategy • Capex: High end of $600 million to $6
Slide 11: Our Strategy
Our Strategy 11
Slide 12: Kohl's has built a powerful foundation
Kohl’s has built a powerful foundation Customers Digital 65M Active Customers 40% Digital sales penetration in 2020 1.6B Website visits 30M Loyalty Members in 2020 29M Kohl’s Charge Card holders Stores GR $5.9B 90% 95% 17% CA $4B $4.5B of stores of Kohl’s stores $3.6B generated $1M+ in are off-mall
Slide 13: The most trusted retailer of choice for the active and casual lifestyle
Our Strategy The most trusted retailer of choice for the active and casual lifestyle Expand Disciplined Strong Operating Capital Organizational Drive Top Line Growth Margin Management Core Destination for Differentiated Agile, Active & Casual Leading with Omni-channel Operating Margin Maintain Stron
Slide 14: Driving top line growth
Driving top line growth Grow Active to Beauty Growth Reignite Extend Casual 30% of Sales with Sephora Women’s Growth Lifestyle to Home • Fuel growth with key national • Highly complementary strategic • New organization structure and • Expand soft home category brands, Nike, Under Armour and partners
Slide 15: Strategic investments are gaining traction
Strategic investments are gaining traction Successful launch of Sephora at Kohl’s Partnership Continued strong Active sales growth • Debuted 200 Sephora at Kohl’s shops and comprehensive digital • Continued strong momentum — sales growth accelerated in Q3 with experience in Q3 penetration growing to
Slide 16: Continuing to enhance Loyalty and Omni-channel capabilities
Continuing to enhance Loyalty and Omni-channel capabilities Investing in Omni-channel Loyalty Members are Transforming the Role Enhance Digital Capabilities More Productive of the Store to Drive Growth • New Kohl’s Rewards loyalty program, added • Modernizing the store experience through refresh • C
Slide 17: Strong execution against our new strategy positions us to achieve 2023 goals
Strong execution against our new strategy positions us to achieve our 2023 strategic goals in 2021, well ahead of plan Gross Margin SG&A Operating ~36% Goal Expense Rate Margin ~27% to ~28% Goal 2021 Guidance of +20 to +40 basis points 8.4% to 8.5% exceeds increase +70 to +150 basis points high end
Slide 18: History of strong cash flow and balanced capital allocation
We have a history of strong cash flow generation along with a focus on maintaining a balanced capital allocation strategy Maintain strong balance sheet Long-term objective of maintaining Investment Grade rating 1 2 3 4 Opportunistic, Share Invest in Dividend complementary repurchases the business M&
Slide 19: Kohl's Continued Commitment to ESG
Kohl's Continued Commitment to ESG Kohl's has a long-standing focus on Environmental, Social and Governance stewardship Excellence Award Recipient 2020 Environmental Social Governance With a large retail footprint, we are in a unique position Understanding and embracing differences for Kohl’s We hol
Slide 20: Appendix
Appendix 20
Slide 21: Reconciliations
Reconciliations Adjusted Net Income (Loss) and Diluted Earnings (Loss) per Share, Non-GAAP Financial Measures (unaudited) Three Months Ended (Dollars in Millions, Except per Share Data) October 30, 2021 October 31, 2020 Net Income (Loss) GAAP $ 243 $ (12) Impairments, store closing, and other — 21 I
Slide 22: Reconciliations
Reconciliations Adjusted Operating Income Free Cash Flow ($ in millions) ($ in millions) October 30, 2021 2019 Three Months Ended Nine Months Ended Operating Income $ 1,099 Net cash provided by operating activities $ 82 $ 1,774 Impairments, store 113 Acquisition of property and equipment (235) (426)
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