Kohl's Corporation · NYSE:KSS
Kohl's — Q1 2021 Earnings Presentation
22 slides from Kohl's's earnings presentation, May 20, 2021
Slide 1: Q1 2021 Results Presentation
Exhibit 99.2 Q1 2021 Results Presentation May 20, 2021Exhibit 99.2 Q1 2021 Results Presentation May 20, 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 expressions are in
Slide 3: Presentation agenda
Q1 2021 Results 10 Driving Top Line Growth Presentation Q1 2021 Results 4 Updated 2021 Outlook 9 Our Strategy 11 3Q1 2021 Results 10 Driving Top Line Growth Presentation Q1 2021 Results 4 Updated 2021 Outlook 9 Our Strategy 11 3
Slide 4: Q1 2021 Results
Q1 2021 Results 4Q1 2021 Results 4
Slide 5: Q1 2021 Results Key Takeaways
Q1 2021 Results Key Takeaways • Q1 2021 net sales and earnings exceeded expectations • Growth driven by continued traction of key strategic initiatives and a favorable consumer spending backdrop • Earnings improvement delivered through strong sales growth, significant gross margin expansion and disc
Slide 6: Q1 Key Metrics
Q1 Key Metrics Consolidated Statement of Operations Three Months Ended (Dollars in Millions) May 1, 2021 May 2, 2020 Net Sales $ 3,662 $ 2,160 Total Revenue 3,887 2,428 Gross Margin Rate 39.0% 17.3% SG&A 1,170 1,066 Depreciation 211 227 Impairments, Store Closings, and Other Costs — 66 Operating Inc
Slide 7: Q1 2021 Gross Margin & SG&A Expense Performance
Q1 2021 Gross Margin & SG&A Expense Performance Gross Margin SG&A Expense Increased 2,173 bps versus Q1 2020 and 223 bps versus Q1 2019 SG&A leveraged 1,379 bps versus Q1 2020 and 107 bps versus Q1 2019 39.0% $1,275M 36.8% $1,170M $1,066M 17.3% % Total Revenue 31.2% 43.9% 30.1% Q1 2019 Q1 2020 Q1 20
Slide 8: Enhanced Liquidity Position
Enhanced Liquidity Position Key Balance Sheet & Cash Flow Items: Q1 2021 January 31, 2021 Beginning Cash $2,271M Key Takeaways Sources • Reduced long-term debt by ~$540M in Q1 2021, improving our leverage profile New Debt $500M • Long history of disciplined and prudent Operating Cash Flow $278M capi
Slide 9: Updated 2021 Outlook
Updated 2021 Outlook 9Updated 2021 Outlook 9
Slide 10: Updated 2021 Outlook
Updated 2021 Outlook Metric Full Year Guidance Mid-to-high teens percent increase Net Sales versus 2020 From a mid-teens percent increase 5.7% to 6.1% Operating Margin From 4.5% to 5.0% $3.80 to $4.20 EPS From $2.45 to $2.95 Capital Allocation Strategy • Capex: $550 million to $600 million • Dividen
Slide 11: Our Strategy
Our Strategy 11Our Strategy 11
Slide 12: Kohl's has built a powerful foundation
Kohl’s has built a powerful foundation Customers Digital Digital sales 40% penetration in 2020 Active Customers 65M Website visits 1.6B in 2020 Loyalty Members 30M Kohl’s App user 21% growth in Q1 2021 Kohl’s Charge Stores 29M Card holders $5.9B 90% 95% $4.5B $4B of stores of Kohl’s stores $3.6B gen
Slide 13: Our Strategy
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 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: Driving top line growth: omni-channel and loyalty
Driving top line growth Investing in Omni-channel Loyalty Members are Transforming the Role Enhance Digital Capabilities More Productive of the Store to Drive Growth • Recently launched Kohl’s Rewards loyalty • Modernizing the store experience through refresh • Continue to invest in the evolution of
Slide 16: Confident in expanding operating margin to 7% to 8%
We are confident in our ability to expand operating margin to 7% to 8% by 2023 SG&A Gross Margin Expense Rate ~36% Goal ~27% to ~28% Goal +20 to +40 basis points +70 to +150 basis points increase 7.0% to 8.0% improvement 6.1% Inventory Digital Stores management penetration / Marketing cost of shippi
Slide 17: 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 18: Agile, accountable & inclusive culture
Agile, accountable & inclusive culture We are evolving how we work Kohl’s is committed to to accelerate our path forward ESG Leadership Excellence Award Recipient 2020 • Kohl’s management, led by CEO Michelle Gass, is committed to fostering a diverse, • Kohl’s ESG journey began more than a equitable
Slide 19: Appendix
Appendix 19Appendix 19
Slide 20: Reconciliations: Adjusted Net Income and Diluted EPS
Reconciliations Adjusted Net (Loss) Income and Diluted (Loss) Earnings per Share, Non-GAAP Financial Measures (unaudited) Three Months Ended (Dollars in Millions, Except per Share Data) May 1, 2021 May 2, 2020 Net Income (Loss) GAAP $ 14 $ (541) Impairments, store closing, and other — 66 Loss on ext
Slide 21: Reconciliations: Adjusted Operating Income and Free Cash Flow
Reconciliations Adjusted Operating Income Free Cash Flow ($ in millions) ($ in millions) May 1, 2021 2019 Three Months Ended Operating Income $ 1,099 Net cash provided by operating activities $ 278 Impairments, store 113 Acquisition of property and equipment (59) closing, and other Adjusted Operatin
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