High expenses lead to bad year at Kohl's
March 1, 2004-- Home Textiles Today,
In what Larry Montgomery, chairman and CEO, admitted was a "disappointment," Kohl's Corporation experienced a rare down year in 2003. The Midwestern retailer's net income fell 8.1 percent last year, to $591.2 million; and its operating income slipped 1.3 percent, to $1.3 billion.
Increases in expenses dampened Kohl's 2003 performance. The company experienced a 40-basis point rise in its selling, general, and administrative expenses as a percentage of net sales, to 20.3 percent. On a dollar basis, SG&A reached $2.1 billion, or 15 percent more than during the 2002 fiscal year.
These figures clouded over a nearly 13 percent pickup in net sales, which totaled $10.3 billion for 2003. As Montgomery noted, last year marked the 12th consecutive year in which Kohl's set a sales record. Simultaneously, however, same-store sales for the year fell 1.6 percent.
For the fourth quarter, net income dropped 11.5 percent, to $246.8 million; and operating income fell by nearly 8 percent, to $482.2 million. Sales grew by almost 12 percent, to nearly $3.6 billion.
Regarding the year to come, Montgomery said, "We are looking ahead to 2004, making improvements where necessary and continuing to focus on profitably increasing our comparable-store sales and increasing market share."
Kohl's plans to open about 95 stores in fiscal 2004, split evenly between entries into new markets and fill-ins for existing markets. Forty-seven of these units are slated to open in the first quarter, and 48 are on the board for the third quarter.
|Qtr. 1/31/04 (x000)||2003||2002||% chg|
|Earnings per share||0.72||0.81||-11.1|
|Average gross margin||30.9%||33.0%||—|
|12 months||2003||2002||% chg|
|Earnings per share||1.72||1.87||-8.0|
|Average gross margin||33.0%||34.4%||—|
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