Kohl's Corporation · NYSE:KSS
Kohl's — Q2 2020 Earnings Presentation
23 slides from Kohl's's earnings presentation, Aug 18, 2020
Slide 1: Q2 2020 Results Presentation
Exhibit 99.2 Q2 2020 Results Presentation August 18, 2020Exhibit 99.2 Q2 2020 Results Presentation August 18, 2020
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 expressions are in
Slide 3: Kohl's Profile
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
Slide 4: Kohl's is Positioned for Long-term Success
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 enha
Slide 5: Q2 2020 Results Presentation
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
Slide 6: COVID-19 Update
COVID-19 Update 6COVID-19 Update 6
Slide 7: Our Top Priorities
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
Slide 8: Protecting Associates And Customers
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 20
Slide 9: Preserving Financial Position
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 Q
Slide 10: Q2 2020 Results
Q2 2020 Results 10Q2 2020 Results 10
Slide 11: Q2 2020 Results Key Takeaways
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 s
Slide 12: Q2 2020 Key Metrics
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)
Slide 13: Q2 2020 Gross Margin
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 (~27
Slide 14: Enhanced Liquidity Position
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 Opera
Slide 15: Our Capital Allocation Priorities
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
Slide 16: 2H 2020 Outlook & Initiatives
2H 2020 Outlook & Initiatives 162H 2020 Outlook & Initiatives 16
Slide 17: 2H 2020 Outlook
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 CO
Slide 18: 2H 2020 Initiatives
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 i
Slide 19: Appendix
Appendix 19Appendix 19
Slide 20: Reconciliations: Adjusted Net (Loss) Income and Diluted EPS
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
Slide 21: Reconciliations: Adjusted EBITDA
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 A
Slide 22: Reconciliations: Free Cash Flow
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
Slide 23: Slide 23