Investor Presentation
March 2024
Cautionary Statement Regarding Forward-Looking Information
This presentation 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. 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 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, which are expressly incorporated herein by reference, and other factors as may periodically be described in the Company'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 macroeconomic conditions such as inflation. Forward-looking statements relate to the date initially made, and Kohl's undertakes no obligation to update them.
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Non-GAAP Financial Measures
In addition, this presentation contains non-GAAP financial measures, including Adjusted Free Cash Flow. Reconciliations of all non-GAAP measures to the most directly comparable GAAP measures are included in the Appendix of this presentation.
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Investment Highlights
Kohl's Foundation
Our Strategic Priorities
Financial Outlook
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A compelling opportunity through extensive repositioning
- New leadership team executing new growth strategy led by accomplished retail veteran Tom Kingsbury
- Sephora at Kohl's driving significant sales gains and is expected to exceed $2B in sales by 2025
- Capitalizing on $2B+ new category growth opportunity across home, baby gear, gifting, and impulse
- Simplifying value strategies to offer consistently competitive prices
- Driving inventory turn while continuing to manage expenses tightly
- Reducing our overall debt while remaining committed to the dividend
- Remain committed to long-term operating margin target of 7% to 8%
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Kohl's is building on a solid foundation
Convenient Nationwide
Omni-Channel Reach
Great Product from Top Brands
60M+
Customers
80%
of Americans live within 15 miles of a Kohl's store
1,174 Stores
Largest department store
chain in America (1)
20M+
Active App Users 900+
Sephora @ Kohl's
29%
Digital Penetration
Delivering Great Value
30M+
Loyalty
Members
All figures 2023 unless otherwise noted | (1) Based on number of locations |
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Meaningful opportunity to improve performance
Long-Term Financial Framework
SALES GROWTH | OPERATING MARGIN |
Low-single digits % | 7% - 8% |
$18,471 | +LSD% | |||
7% to 8% | ||||
8.6% | $17,161 | $16,586 | (1%) to +1% | |
3.6% to 4.1% | ||||
4.1% | ||||
1.4% | ||||
2021 | 2022 | 2023 | 2024(e)(1) | Long-Term |
Net Sales (Millions) | Operating Margin | |
- Delivered 2023 earnings ahead of guidance range, with best comparable store sales performance since 2010
- Well-positionedfor improved results in 2024, with expected comp sales growth and gross margin expansion
- Significant growth opportunity driven by Sephora at Kohl's and new category expansions, supported by stability in our apparel and footwear offerings
- Remain committed to our 7% to 8% long-term operating margin target, which will be driven predominantly by leverage on higher sales
(1) Based on 2024 guidance. 2024 is a 52 week year versus 2023 which was a 53 week year. Comparable sales guidance for 2024 is 0% to 2%. 2024 guidance includes potential impact from CFPB late fee regulatory changes in second half of 2024. | 6 |
New leadership team positioned to capitalize on opportunity
Tom Kingsbury appointed as CEO in 2023, bringing exceptional industry expertise and leadership experience in transformational strategies
- Track record of growing retail businesses, coupled with deep knowledge of the Company through previous roles at Kohl's, both as a director and as an executive
- Proven progress to date on strategy, including the best comparable store sales performance since 2010 in 2023 as well as enhanced inventory disciplines, resulting in a 10% YoY reduction in inventory at year-end 2023
- Refreshed Kohl's leadership team with talented retail executives and reorganized merchandising and marketing departments to drive sales productivity and efficiency in operations
Supported by strong operating committee with relevant retail experience
Jill Timm | Nick Jones (1) Fred Hand (1) | Siobhán | Christie | Mari | Michelle | Jennie Kent (1) Gregg Barta (1) |
Mc Feeney | Raymond | Steinmetz (1) | Banks |
Chief Financial | Chief | SEVP, Director of | Chief Technology | Chief Marketing | Chief People | Chief DEI Officer | Chief Legal Officer | EVP - Supply Chain |
Officer | Merchandising & | Stores | Officer | Officer | Officer | & Corporate | & Logistics | |
(Since Nov. 2019) | Digital Officer | (Since Sep. 2023) | (Since Jul. 2022) | (Since Aug. 2022) | (Since Apr. 2023) | (Since May 2021) | Secretary | (Since Nov. 2023) |
(Since Mar. 2023) | (Since Feb. 2023) | |||||||
(1) Indicates new leadership position in 2023 | 7 |
Strategic Priority Highlights
Enhance the
Customer Experience
- Re-establishingstores as key focal point to regain sales productivity
- Sephora sales expected to exceed $2 billion by 2025
- $2+ billion of incremental sales opportunity in new categories
- Driving customer engagement through more relevant apparel and footwear offerings
Accelerate and
Simplify Our Value
Strategies
- Increasing productivity through targeted offers and timely clearance events
- Enhancing value perception by offering more competitive and consistent pricing
- Expansion of co-brand credit card represents significant opportunity
- Leverage industry leading loyalty program (Kohl's Cash, Kohl's Rewards, Kohl's Card)
Manage Inventory and Expenses with Discipline
- Increasing inventory turns by embedding new inventory management processes
- Planning inventory down mid-single digits % with increased ability to chase
- Continuing to manage expenses tightly with greater marketing efficiency and automation
Strengthen the
Balance Sheet
- Driving cash flow through inventory management and lower capital spend ⁜ in 2024
- Reducing long-term debt and overall leverage
- Maintaining balanced capital allocation strategy and commitment to dividend
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Our Strategic Priorities
Enhance the
Customer Experience
- Re-establishingstores as key focal point of strategy by creating an engaging in-store experience to regain sales productivity
- Sephora sales expected to exceed $2 billion by 2025
- $2+ billion of incremental sales opportunity in under-penetrated categories (e.g. home, baby gear, gifting, impulse)
- Driving customer engagement through more relevant apparel and footwear offerings with new go-to market strategies
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ENHANCE THE CUSTOMER EXPERIENCE
Re-establishing stores as a key focus to drive productivity
Store Experience Actions
900+ Sephora at Kohl's locations
Enhanced signage and simplified graphics
Front-of-store seasonal gifting destination
Expanded self-checkout kiosks
Improving merchandising flow & adjacencies (in progress)
Expanding impulse checkouts to additional 350 stores
(in progress)
Best comparable store sales performance since 2010
Evidence our strategy is working
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Disclaimer
Kohl's Corporation published this content on 12 March 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 12 March 2024 11:17:16 UTC.