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Kohl’s Corporation
                              N56 W17000 Ridgewood Drive
                             Menomonee Falls, WI 53051-5660
                                    (262) 703-7000
                                    www.kohls.com




Printed on recycled paper.
Kohl’s Corporation
      2000 Annual Report




that’s more like it®
      more growth
      more expansion
      more brands
      more convenience
      more value
Kohl’s is a family-oriented
department store.




                                profile
Contents
                                As of April 2001, Kohl’s operates 354 family-oriented,
1   More Growth

2   Letter to Shareholders      specialty department stores in 28 states that feature quality,

3   Message from Bill Kellogg
                                national brand merchandise priced to provide exceptional
4   More Expansion
                                value to customers. The company’s stores sell moderately
8   More Brands and Value
                                priced brand-name apparel, shoes, accessories and home
10 More Convenience
                                products targeted to middle income consumers shopping
12 More Community Involvement

                                for their families and homes. Kohl’s focuses on providing
13 More Opportunities
   for Associates
                                convenient shopping in neighborhood locations close to
14 Financial Highlights
                                where our customers live and work.
15 Corporate Information
more growth
Financial Highlights
                                                                                                               Another
Net Sales                                                2000                        $ 6,152
                                                                                                      up 35%
                                                         1999                        $ 4,557
(In millions of dollars)

                                                                                                               Record Year
                                                                                                               Since going public in 1992, Kohl’s has
Operating Income                                         2000                        $ 651
                                                                                                      up 45%
                                                         1999                        $ 448
(In millions of dollars)                                                                                       established a record of consistently
                                                                                                               strong financial performance. On a
Net Income                                               2000                        $ 372                     compounded growth rate basis
                                                                                                      up 44%
                                                         1999                        $ 258
(In millions of dollars)
                                                                                                               (excluding non-recurring charges),
                                                                                                               our net income has increased 38
Diluted Net Income Per Share(1)                          2000                        $ 1.10
                                                                                                      up 43%   percent over the last five years and
                                                         1999                        $ 0.77
                                                                                                               33 percent since 1992. Net income
                                                                                                               increased 44 percent in 2000. This
Number of Stores                                         2000                               320
                                                                                                      up 24%
                                                         1999                               259                was the highest percentage increase
                                                                                                               in the last five years and our fifth
Total Square Feet of Selling Space                       2000                        23,610                    consecutive year of earnings growth
                                                                                                      up 26%
                                                         1999                        18,757
(At year end in thousands)
                                                                                                               exceeding 30 percent.




                                                                                                               Diluted Net Income Per Share (1)
Net Sales                                                 Net Income
(in millions of dollars)                                  (in millions of dollars)




                                                $6,152                                              $372                                         $1.10

             26.7%                                                                                                     34.1%
                                                                        38.2%
              CAGR*                                                                                                    CAGR*
                                                                         CAGR*

                                     $4,557
                                                                                                                                      $.77
                                                                                             $258

                           $3,682
                                                                                                                               $.59
                                                                                     $192
              $3,060

                                                                                                                       $.45
 $2,388
                                                                         $141
                                                                                                                $.34
                                                            $102




   96           97          98          99          00                                                          96     97      98     99          00
                                                             96           97         98       99    00

* Compounded annual growth rate.
(1)
    Adjusted for stock splits in 1996, 1998 and 2000.

                                                                                                                                           Ko h l ’s C o r p o r a t i o n   1
dear
                                                               shareholders:
                                                               Fiscal 2000 was an outstanding year for Kohl’s. Our increases in
                                                               sales and income were some of our highest ever and once again,
                                                               our record-breaking results far outpaced many other retailers.

                                                              Our ability to deliver this consistently strong performance
                                                              is the result of our focus on convenience and value for our
                                                              customers, the successful execution of our expansion strategy,
    From left: Arlene Meier,
                                                 and most importantly, the best Associates in retail. Put these together and
    Larry Montgomery and Kevin Mansell.
                                                 you have the ‘more’ behind “That’s more like it” and the essence of all that we do.

                                                 Consistently Strong Performance
    Thank You to                                 From a performance standpoint, ‘more’ means exceeding our goal to
    Bill Kellogg                                 increase sales and earnings by at least 20 percent each year. In 2000,
                                                 net sales increased 35 percent to $6.2 billion. Net income rose 44 percent
    We are fortunate to have worked with
                                                 to $372.2 million or $1.10 per diluted share. Kohl’s also had an excellent
    Bill Kellogg, who retired in January from    holiday season. Fourth quarter net sales rose 38 percent and net income
                                                 increased 48 percent.
    his day-to-day operating responsibilities.

                                                 Comparable store sales increased nine percent in 2000, consistent with
    In the investment community, Bill is well    our average over the past five years and well above the performance of our
                                                 direct competitors. We remain focused on increasing our market share and
    known for his vision and leadership in
                                                 successfully opening new stores.
    creating the Kohl’s concept and building
                                                 Our outstanding performance has resulted in more value for our shareholders.
    the company from just 40 stores in 1986 to
                                                 Our stock price increased from $34.41 per share at the end of 1999 to $68.48
    320 at the end of 2000. Internally, Bill’s
                                                 at the end of 2000. Cumulatively, a $1,000 investment in Kohl’s initial pubic
    support and commitment to our                offering in 1992 had grown to over $39,000 at the end of fiscal 2000.
    Associates is legendary. His philosophy
                                                 Fast-Paced Growth
    that ‘people make the difference’ is the
                                                 ‘More’ also describes our expansion strategy. We opened 61 stores in 2000
    focal point of our culture and the secret
                                                 to end the year with 320 stores. This includes our successful entry into the
    to our success.
                                                 tri-state market of New York, New Jersey and Connecticut with 35 stores.
                                                 Our success in this market has exceeded our initial expectations and we plan
    We know we speak for everyone                to continue adding fill-in stores to further strengthen our presence in this region.
    associated with Kohl’s in thanking Bill
                                                 This year, we plan to open approximately 60 additional stores. In March
    for his role in Kohl’s growth, and we look   and April, we opened 34 stores, including our entries into Atlanta with
                                                 15 stores, Hartford/New Haven with four stores and Fayetteville/Ft. Smith,
    forward to his continuing counsel as
                                                 Arkansas, with three stores. This fall, we will open approximately 26 stores
    Chairman of the Board.
                                                 and enter the new markets of El Paso, Austin and Oklahoma City.




2   Ko h l ’s C o r p o r a t i o n
In 2002, we plan to open approximately 70 stores. We will expand fur-
 ther into the Northeast with a major entry into the Boston market and
 will enter the Houston market for the first time. In 2003, we plan to
 begin a major expansion into the Southwest with a significant entry into
 Los Angeles, giving us the coast-to-coast coverage that will move us
                                                                                To My Fellow
 from a regional to a national retailer. Plans are also currently under-
 way for further entries into Southern California, Arizona and Nevada in
                                                                                Associates:
 2003 and 2004.
                                                                                I would like to take this opportunity to
                                                                                thank all of the Associates I have worked
 Focus on Convenience                                                           with over the years at Kohl’s. It is
                                                                                because of your efforts that Kohl’s is the
 Convenience is very important to our customer. Our ample and well-lit
                                                                                tremendous success it is today. I have
 parking, handy stroller carts, functional store layout, in-stock position
                                                                                always believed that Kohl’s Associates
 and central check-out make shopping at Kohl’s fast and easy.
                                                                                are exceptional. Your hard work and
                                                                                commitment to our customers and your
 In 2001, we will add on-line shopping for those customers who want
                                                                                company have created a unique culture
 the convenience of shopping from home. Our entry into e-commerce
                                                                                that thrives on the growth of our people
 has been well researched and deliberately planned to ensure our
                                                                                as well as our performance.
 customers the same level of service they have come to expect from
 our stores. A new fulfillment center has been built in Ohio specifically       To our customers, you are Kohl’s.
                                                                                Whether you welcome customers to
 to service these customers. Effective utilization and leverage of our
                                                                                your store with a smile and a friendly
 established corporate functions provides a financially sound foundation
                                                                                hello, provide critical store support as
 for our on-line shopping business. Although e-commerce will contribute
                                                                                part of our distribution center team or help
 only a small percentage of total sales in its first year, it will complement
                                                                                to keep things running as a member of
 our existing stores and provide an added service for our busy customers.       our corporate staff, you have an important
                                                                                role in our success. The credit for our
 Outstanding Associates                                                         many achievements belongs to all of you.
 Of course, no report on the year is complete without a thank you to the        While I will continue to serve as
 people who made it happen – our Associates. In our business, success is        Chairman of the Board, I am proud that
 more than buildings and merchandise. It takes great people, and whether        the management transition process we
 they work in our stores, distribution centers or corporate office, our         began in 1998 was completed in a
                                                                                smooth and seamless manner. With the
 Associates are the driving force behind all of our achievements. We are
                                                                                leadership of Larry Montgomery as chief
 proud of this outstanding group of people whose friendly service and
                                                                                executive officer, Kevin Mansell as
 caring attitude have made Kohl’s the company to watch in retailing today.
                                                                                president and Arlene Meier as chief
                                                                                operating officer, we are well positioned
 With coast-to-coast expansion on the horizon, the years ahead will
                                                                                to continue our expansion strategy.
 be an exciting time for Kohl’s. We want to thank all of our Associates,
 shareholders, customers and vendors for their continuing confidence            Thank you all for a great 33 years.kuris.
 and support as we take Kohl’s to the next level.




                                                                                Bill Kellogg
Larry Montgomery              Kevin Mansell         Arlene Meier                Chairman of the Board
Chief Executive Officer       President             Chief Operating Officer
more expansion
     Expansion                                         Kohl’s Targets the Northeast
     Strategy                                          The opening of 35 stores in the tri-state market of New York, New Jersey
                                                       and Connecticut in 2000 was highly successful, with results that substantially
     Kohl’s objective is to be a national
                                                       exceeded our initial projections. With this strong start, Kohl’s has captured
     retailer. Our approach is very
                                                       a solid share of one of the most attractive retail markets in the country.
     deliberate, expanding step-by-step
                                                       Building on this base, we will expand into the Hartford/New Haven market
     into contiguous states and filling in
                                                       in 2001 and make a major entry into New England in 2002. Our New
     existing markets. We enter major
                                                       England entry will be through the acquisition of 12 former Bradlees stores
     new markets with a critical mass of
                                                       in the Boston market and three stores in New Jersey, which we will remodel
     stores that enables us to establish a
                                                       and reconfigure to the Kohl’s prototype. The acquisition provides an excellent
     presence and leverage marketing,
                                                       opportunity to bring the Kohl’s shopping experience to customers in this
     regional management and distribution              major Northeast metropolitan area.
     expenses. Once established, we add
                                                       We will support our Northeast expansion with a new distribution center
     additional stores to further strengthen
                                                       in New York state. Opening at the end of this year, the new center will have
     our market share.
                                                       the capacity to serve up to 100 stores.
     Many of Kohl’s stores are located in

                                                       New Stores in Atlanta and Arkansas
     the growing suburban areas of large
     metropolitan markets, close to the                In spring 2001, we opened 34 stores, including our entry into the fast-
                                                       growing Atlanta market with 15 stores. As a major population center,
     neighborhoods where our customers
                                                       Atlanta has the ideal demographics for Kohl’s. We also entered Arkansas
     live and work. In developing new
                                                       for the first time with three stores, further strengthening our presence in
     stores, we generally focus on
                                                       the South Central United States.
     free-standing locations or power
     strip malls that provide the visibility,
     parking and ease of entry that our
     customers prefer.




                                  Kohl’s entered the
                               fast-growing Atlanta
                              market in spring 2001.



4   Ko h l ’s C o r p o r a t i o n
more neighborhoods
             coast to coast
              Expansion Plans
              Over the next three years, Kohl’s expansion plans will move
              the company from a regional retailer to a national chain, with
              stores from coast to coast.

              We carefully research new markets to be certain we can be
              successful in both merchandising and operations. When we
              enter a new market, new store openings are preceded by an
              aggressive marketing program that positions Kohl’s as a brand,
              drives sales through highly promotional events, and supports
              these activities with extensive television, radio and print
              advertising. These highly effective targeted marketing activities
              have proven to be instrumental in quickly achieving the
              performance objectives of new stores.



              Growth in South Central States
              In fall 2001, Kohl’s will enter the new markets of El Paso and
              Austin, Texas, and Oklahoma City, Oklahoma. We will enter
              Houston with a major presence in 2002. In addition to expand-
              ing into new regions, we will continue to fill in existing markets
              including the Midwest and Mid-Atlantic regions.



              Moving Westward
              Looking ahead, we plan to begin a major expansion into the
              Southwest, beginning with our entry into the Los Angeles
              market in 2003. We plan to build on this base with additional
              entries in Southern California, Arizona and Nevada in 2003
              and 2004. Plans are also underway for a sixth distribution
              center to support this growth. Our coast-to-coast presence will
              put Kohl’s on the map as a major national retailer.




5   Ko h l ’s C o r p o r a t i o n
Existing States
    2000 Expansion States
    2001 Expansion States
    Future Expansion States
    Store Locations
H   Major Market Expansion




             Ko h l ’s C o r p o r a t i o n   7
The Brands Customers Want
                                                                     When you look at the many attributes that make Kohl’s
                                                                     popular with customers, brand names are at the top of
                                                                     the list. With national brands accounting for the majority
                                                                     of our merchandise, customers know they can find the
                                                                     brand names they want, in today’s popular styles and colors.

                                                                      In 2000, we strengthened our merchandise mix with two
                                                                      major new brands. The Arrow line of men’s dress and
                                                                      sport shirts, as well as casual pants, was introduced in
                                                                      spring and is now available in every store. The well-known
    Customers count on Kohl’s for popular                             Columbia brand of outerwear and sportswear for both
    brand-name merchandise.
                                                 men and women was a hit with customers from its introduction in spring to
                                                 its expansion into kids in the fall. In 2001, the Columbia brand will be included
                                                 in almost every major apparel and accessory classification throughout the
    The Kohl’s Promise                           store. Kohl’s own Sonoma and Croft & Barrow brands complement our
                                                 brand-name merchandise in many departments throughout the store.
    As we continue to grow and expand into
    new markets, we are building Kohl’s
                                                 Wide Selection of Colors and Sizes
    identity as a leading national retailer.
                                                 Not only do customers want brand names, they also want them in a
    The Kohl’s brand is our promise to our
                                                 variety of sizes and colors, all in stock. Kohl’s sophisticated merchandise
    customer. The promise of a better            management program ensures that our customers find the sizes and colors
                                                 they need in the style they want. Because our merchandise selection varies
    shopping experience. The assurance that
                                                 by geographic area, seasonal items are in the stores in anticipation of
    her trip will be successful because we
                                                 customer needs. And whether it’s basic apparel or home merchandise,
    have the brands she wants in the colors
                                                 key items are prominently displayed for added convenience.
    and sizes she needs, all in stock. The
    promise that we will deliver more quality,
                                                 Extra Services Make a Difference
    national brands, deep selection, value and
                                                 For busy Kohl’s shoppers, the extras make a difference. Kohl’s gift cards are
    convenience, with less effort, time and      perfect for birthdays, anniversaries or that person who has everything. Gift
                                                 receipts make returns and exchanges fast and easy. Our gift registry helps
    hassle for her.
                                                 newlyweds in furnishing their first home and provides shopping ideas for
                                                 other special events.

                                                 Kohl’s strong credit card program enables customers to track their purchases
                                                 and provides extra benefits such as advance notice of major sales and
                                                 additional savings during eight special events each year. Our “Most Valued
                                                 Customer” (MVC) program continues to grow, further expanding our base
                                                 of loyal customers.




8   Ko h l ’s C o r p o r a t i o n
more brands and value              Kohl’s focuses on women shopping
                                   for themselves and their families.




Popular National
Brand Names
What differentiates Kohl’s from
many of its competitors is our
emphasis on brand-name
merchandise. From well-known
women’s apparel lines to popular
athletic shoes, quality cookware
and home goods, Kohl’s has the
brands our customers want.




                                                   Ko h l ’s C o r p o r a t i o n   9
Centralized check-out gets busy
     customers quickly on their way.




     Focusing on
     Customer Needs
     What does convenience really mean to a
     Kohl’s customer? It means we’ve helped
     to make her shopping a lot more efficient
     and her life a little easier. It means she
     can find the brand names and selection
     she wants in a pleasant shopping
     environment close to home. It means
     she has more time to spend on her family,
     herself, or her community. Now, that’s
     more like it!




                                        Wide aisles and stroller
                                       carts enhance the Kohl’s
                                          shopping experience.



10   Ko h l ’s C o r p o r a t i o n
more convenience
A Pleasant Shopping
Experience
Our market research and customer feedback
confirms what we’ve always known: customers
love the convenience of Kohl’s. That’s why
we’re continually looking at new ways to make
the Kohl’s shopping experience even better.


Why Customers Shop Kohl’s
At Kohl’s, convenience begins before the
customer enters the store, with a neighborhood
location close to home. Ample, well-lit parking and
an easily accessible entry make customers feel
welcome. Inside the store, carts that double as
strollers make it easy to select a variety of quality
brand-name merchandise from different departments.
Wide aisles and a functional store layout help
customers to quickly locate the departments and
                                                                                   Key items are prominently displayed
merchandise they’re looking for. Friendly, helpful Associates and clean,           for easy shopping.
accessible fitting rooms further enhance the shopping experience.
Fast, centralized check-out gets customers on their way, and when a size
or color isn’t right, our no hassle return policy ensures a smooth
                                                                                   Key Items
exchange or refund.

                                                                                   Drive Traffic
Customers frequently plan their shopping trip around ideas found in our
newspaper inserts. The inserts, along with our television and radio advertising,
                                                                                   Merchandising is an important aspect of
provide an exciting overview of our featured merchandise and special
promotions. With all advertising centered around our “That’s more                  convenience at Kohl’s. Customers count
like it” positioning, customers know Kohl’s is a unique experience.                on us to always have an ample selection
                                                                                   of key items such as shirts, denim and
E-Commerce Adds Convenience
                                                                                   khakis. Traffic for these key items, which
In 2001, Kohl’s will introduce on-line shopping on our existing Web site:
                                                                                   comprise about 10 percent of our
www.kohls.com. Designed as an added service for customers who prefer to
shop from their homes, the Web site will offer popular key items and best-         merchandise selection, is driven by our
selling family apparel and home merchandise. The site is designed to provide
                                                                                   newspaper inserts and other advertising.
an easy-to-navigate on-line shopping environment that complements the
                                                                                   Targeted for shoppers in a hurry, the key
company’s in-store focus on convenience. An added benefit for Kohl’s on-line
shoppers is the ability to easily return or exchange items at any Kohl’s store.    items are prominently displayed with
                                                                                   attention-getting signage.
The site will be fully integrated into other marketing activities, including
our weekly newspaper inserts and advertising. Staffing will be similar to
a new market entry, blending outside people who have e-commerce expertise
with Kohl’s Associates who understand our philosophy and culture.



                                                                                                                Ko h l ’s C o r p o r a t i o n   11
more community
                                                                   involvement
                                                                                    Kohl’s Cares for Kids              ®


                                                                                    Kohl’s expanded its commitment to community
                                                                                    involvement and kids with the nationwide launch of
                                                                                    its “Kohl’s Cares for Kids” program in 2000. As an
     Kohl’s Associates Becky England and
                                                                                    extension of the company’s focus on families, the
     Wyndell Bitner worked on holiday art
                                                                                    multi-faceted program is designed to improve the lives
     projects with patients at the Carol Jo
     Vecchie Women and Children’s Center                                            of children in the communities Kohl’s serves.
     at St. John’s Children’s Hospital in
     Springfield, Missouri.
                                                            Supporting Children’s Hospitals This program features special seasonal
                                                            merchandise, with all profits being donated to children’s hospitals in Kohl’s
                                                            local communities. More than 1.3 million items were purchased through
                                                            these promotions in fall and holiday 2000.
     Associate
                                                            Fundraising Gift Cards A second component of “Kohl’s Cares
     Volunteer Program                                      for Kids” is a fundraising card program. Schools and
     Building on Kohl’s commitment to                       non-profit youth organizations sell special “Kohl’s Cares
                                                            for Kids” gift cards, with up to five percent of the total
     Associates and their communities, the
                                                            purchase price going back to the community youth
     company’s new Associate Volunteer
                                                            organization.
     Program encourages Associates to
                                                            “Kohl’s Kids Who Care™” Knowing that kids, too, have an
     volunteer as teams to support local
                                                            important role in making their communities a better place, the
     non-profit organizations that enrich the               “Kohl’s Kids Who Care” program recognizes and rewards kids who
                                                            contribute to their communities in special ways. Customers can nominate a
     lives of children in their communities. In
                                                            special kid for recognition and awards, ranging from a $50 gift card for
     addition to the volunteer time contributed
                                                            store-level winners to post-secondary education scholarships for regional
     by Associates, the organizations also
                                                            and national winners.
     receive a matching grant from Kohl’s.




                          Kohl’s focus on kids includes
                          working with local children’s
                              centers. Enjoying a recent
                         visit to a center are Associates
                                (from left) Lisa Loewus,
                        Robert Patterson, Sue Schwenk
                                      and Sheila Schultz.



12   Ko h l ’s C o r p o r a t i o n
more opportunities
     for associates
A Great Place to Grow
Because Kohl’s Associates are so important to our success, we strive to
provide a work environment that encourages them to stay and grow with
the company. In 2000, over 70 percent of our management trainees were
from within the company. Our college recruitment program now includes
over 45 colleges and universities.
                                                                                       Kohl’s Core Values
Kohl’s training programs also provide opportunities for growth. In 2000, over          As Kohl’s continues to grow in size and
40,000 Associates participated in these programs. As a result of our fast-paced        scope, management recognized the need
growth, we have focused on further developing our management teams and                 to formalize the core values that commu-
                                                                                       nicate the company’s goals and priorities
preparing executives and Associates to efficiently open new stores in new markets.
                                                                                       to all of our Associates across a broad
                                                                                       geographic base. Kohl’s ideals are
Commitment to Associates                                                               encompassed in three basic values:
Kohl’s is committed to sharing its success with all Associates, both full-
                                                                                       Associates - Our Associates are our
and part-time. Our benefit programs provide opportunities to share financial
                                                                                       partners in the success of the company.
rewards as well as offer added security and personal convenience.
                                                                                       Customers - We always want to ensure
                                                                                       convenience, brand names and value.
In 2000, we introduced a new medical flexible spending account to help
                                                                                       Performance - Driving the top line and
Associates reduce their medical expenses. We also implemented a low cost
                                                                                       managing expenses produces exceptional
medical insurance program for part-time Associates in recognition of their
                                                                                       results.
significant contribution to our success. And our Associate scholarship program
will award more than 40 scholarships for the 2001-2002 school year.                    The three values, which are equal in
                                                                                       importance, have been, and will continue
Kohl’s Employee Stock Ownership Plan (ESOP) continues to                               to be, the drivers behind Kohl’s success.
be one of our most significant benefits. The ESOP, which was
started in 1992, is now valued at over $100 million, underscoring
the fact that at Kohl’s, our Associates truly do make a difference.




Training Programs
Help Build Careers
With our fast-paced expansion, Kohl’s is a great place for people
who want to gain experience and advance their career. As part
of the Kohl’s team, our Associates have opportunities to grow
both personally and professionally.

We continue to invest in computer-based training, adding to
                                                                         Computer-based training
programs focusing on customer service, productivity and
                                                                         enables Associates to participate
execution of our best practices. Computer-based training
                                                                         in classes or work on their own at
programs have also been introduced at the executive levels,              a time that meets their needs.
giving managers rapid access to training as they need it.

                                                                                                                 Ko h l ’s C o r p o r a t i o n   13
financial highlights
     Fiscal Year                                                             2000                1999                 1998                 1997                 1996                 1995                 1994                 1993                 1992

     Summary of Operations (In millions)
     Net sales                                                           $ 6,152             $ 4,557              $ 3,682              $ 3,060              $ 2,388              $ 1,926              $ 1,554              $ 1,306              $ 1,097
     Gross margin                                                            2,096                1,543                1,235                1,014                  780                  631                  516                  437                  374
     Selling, general & administrative expenses                              1,282                  975                  810                  679                  536                  436                  357                  306                  269
     Non-recurring charges                                                         -                     -                    -                    -                    -                  14(b)                  -                    -                 18 (a)
     Preopening expenses                                                         35                   31                   16                   19                   10                   11                     8                    5                    3
     Depreciation and amortization                                             127                    89                   70                   57                   44                   34                   27                   23                   20
     Operating income                                                          651                 `448                  338                  259                  189                  136 (b)              124                  102                    65 (a)
     Interest expense, net                                                       46                   27                   21                   24                   18                   13                     6                    6                  14
     Income before income taxes                                                605                  421                  317                  235                  171                  123                  118                    97                   50 (a)
     Income before extraordinary items                                         372                  258                  192                  141                  103                    73 (b)               69                   56                   29 (a)


     Diluted Earnings Per Share (c)
     Income before extraordinary items                                        1.10                   .77                  .59                  .45                  .34                  .24 (b)              .23                  .19                  .11 (a)


     Financial Position Data                     (Dollars in millions)

     Working capital                                                     $ 1,199             $      732           $      559           $      525           $      229           $      175           $      115           $        87          $      106
     Property and equipment, net                                             1,727                1,353                  933                  750                  596                  409                  299                  187                  141
     Total assets                                                            3,855                2,931                1,936                1,620                1,123                  805                  659                  469                  445
     Long-term debt                                                            803                  495                  311                  310                  312                  188                  109                    52                   95
     Shareholders’ equity                                                    2,203                1,686                1,163                  955                  518                  411                  334                  263                  207
     Return on average shareholders’ equity                                   19.1 %               18.1%                18.2 %               19.2 %               22.1 %               21.7%                23.0 %               23.7 %                 n/a


     Other Data
     Comparable store sales growth                                              9.0 %                7.9 %                7.9 %              10.0 %               11.3 %                 5.9 %                6.1 %                8.3 %              10.5 %
     Net sales per selling square foot                                   $     281           $      270           $      265           $      267           $      261           $      257           $      258           $      255           $      239
     Gross margin (percentage of net sales)                                   34.1 %               33.9 %               33.5 %               33.1 %               32.7 %               32.8 %               33.2 %               33.5 %               34.1 %
     SG&A (percentage of net sales)                                           20.8 %               21.4 %               22.0 %               22.2 %               22.4 %               22.6 %               23.0 %               23.4 %               24.5 %
     Stores open at year end                                                   320                  259                  213                  182                  150                  128                  108                    90                   79
     Total square feet of selling space (In thousands) 23,610                                    18,757               15,111               12,533               10,064               8,378                 6,824                5,523                4,771
     Market price (c): High                                              $ 72.20             $ 40.63              $ 33.88              $ 18.84              $ 10.50              $     7.28           $     6.91           $     6.52           $     4.36
                                  Low                                        34.06                30.75                17.03                 9.72                 6.69                 5.00                 4.75                 3.88                 1.66


     (a) The year ended January 30, 1993, includes a non-recurring incentive compensation charge of $17.7 million ($10.6 million after-tax) or $.04 per share.
     (b) The year ended February 3, 1996, includes a non-recurring credit operations charge of $14.1 million ($8.3 million after-tax) or $.03 per share.
     (c) Adjusted for stock splits in 1996, 1998 and 2000.
     Forward-Looking Statements
     Certain statements made within this report are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by the use of forward-looking terminology such
     as ”plans”, “believes”, “expects”, “may”, “will”, ”should”, or “anticipates” or the negative thereof or other variations thereon. Such statements are subject to certain risks and uncertainties which could cause Kohl’s actual results to differ materially
     from those anticipated by the forward-looking statements. These factors include, but are not limited to: competition, fluctuations in consumer demand, seasonal business trends, economic conditions, government activities and other factors as may
     periodically be described in Kohl’s filings with the Securities and Exchange Commission.

14   Ko h l ’s C o r p o r a t i o n
corporate information
                                                                                                            Directors
                                                              Corporate Headquarters
                                                              Kohl’s Corporation                            Jay H. Baker—Retired President,
                                                       651
                                                              N56 W17000 Ridgewood Drive
                                                                                                                 Kohl’s Corporation
                                                              Menomonee Falls, Wisconsin 53051-5660
                                                                                                            Wayne Embry—Consultant to the Cleveland
                                                              (262) 703-7000
                                                                                                                 Cavaliers (a) (c)
                                                              Web site: www.kohls.com
                        36.2%                    448
                                                                                                            James D. Ericson—President and Chief
                         CAGR*
                                                              Transfer Agent and Registrar                       Executive Officer, Northwestern Mutual
                                                              The Bank of New York
                                           338
                                                                                                                 Life Insurance Company (b) (c)
                                                              Shareholder Relations Dept. 11-E
29.6%                                259
                                                                                                            John F. Herma—Retired Chief Operating
 CAGR*                                                        P.O. Box 11258
                                                              Church Street Station                              Officer, Kohl’s Corporation
                             189
                                                              New York, New York 10286
                      150
                                                                                                            William S. Kellogg—Chairman of the Board,
               124
                                                              (800) 524-4458
        102
   82
                                                                                                                 Kohl’s Corporation (c)
                                                              Annual Meeting                                Kevin Mansell—President, Kohl’s Corporation
  92    93      94     95     96     97    98    99    00
                                                              The 2001 Kohl’s Annual Meeting of             Arlene Meier—Chief Operating Officer,
 Operating Income(1) (In millions of dollars)                 Shareholders will be held on Thursday,
                                                                                                                 Kohl’s Corporation
                                                              May 31, at 10:00 a.m. at the Four Points
                                                                                                            R. Lawrence Montgomery—Chief Executive
                                                              Sheraton Hotel, Milwaukee, Wisconsin.
                                                                                                                 Officer, Kohl’s Corporation
                                                              Investor Information/
                                                       372
                                                                                                            Frank V. Sica—Managing Director,
                                                              Quarterly Reports                                  Soros Fund Management LLC (a) (b) (c)
                                                              For quarterly earnings reports and other
                                                                                                            Herbert Simon—Co-Chairman, Simon Property
                                                              investor information, please visit our
                                                                                                                 Group, Inc. and Melvin Simon &
                                                              web site at www.kohls.com or direct your
                       38.2%                     258
                        CAGR*                                 inquiries to the company, Attention:               Associates (b)
                                                              Shareholder Relations.
                                                                                                            Peter M. Sommerhauser—Shareholder in
                                           192

                                                                                                                 the law firm of Godfrey & Kahn, S.C.
                                                              Form 10-K
32.6%
 CAGR*                              141
                                                                                                            R. Elton White—Retired President, NCR
                                                              Parts I–III of Kohl’s Annual Report on
                                                              Form 10-K, as filed with the Securities and
                             102
                                                                                                                 Corporation (a) (c)
                                                              Exchange Commission, are included with
                       81
               69
         56
                                                              this report for all shareholders.
                                                                                                            Executive Officers
  39

                                                                                                            John J. Lesko—Executive Vice President-
                                                              Common Stock
  92    93     94      95     96     97    98    99    00

                                                                                                                 Administration
                                                              Kohl’s common stock is listed on the New
Net Income(1) (In millions of dollars)
                                                              York Stock Exchange under the symbol KSS.     Rick Leto—Executive Vice President-
                                                                                                                 General Merchandise Manager and
                                                              Common Stock Price Range                           Product Development
                                                              Fiscal 2000           High        Low
                                                       320
                                                                                                            Kevin Mansell—President
                                                              First Quarter       $ 54.78     $ 34.06
                                                                                                            Arlene Meier—Chief Operating Officer
                                                              Second Quarter        66.50       44.00
                                                              Third Quarter         64.75       49.06       R. Lawrence Montgomery—Chief Executive
                                                 259

                                                              Fourth Quarter        72.20       48.44
                                                                                                                 Officer
                       20.9%               213
                        CAGR*
                                                                                                            Jack E. Moore, Jr.—Executive Vice President-
                                                              Fiscal 1999           High        Low
                                    182
                                                                                                                 General Merchandise Manager
                                                              First Quarter       $ 39.00     $ 31.38
                                                              Second Quarter        40.63       31.75
                             150
                                                                                                            Don Sharpin—Executive Vice President-
19.1%                 128
                                                              Third Quarter         39.97       30.75
 CAGR*
                                                                                                                 Human Resources
               108
                                                              Fourth Quarter        39.22       31.47
                                                                                                            Gary Vasques—Executive Vice President-
         90
  79

                                                                                                                 Marketing
                                                              Shareholders
                                                              As of March 19, 2001, there were 6,128
                                                              holders of record of Kohl’s common stock.     (a) Audit Committee
 92     93     94     95     96     97     98    99    00
                                                                                                            (b) Compensation and Stock Option Committee
                                                                                                            (c) Nominating Committee
 Stores Open at Year End
                                                                                                                                                          Ko h l ’s C o r p o r a t i o n   15
* Compounded annual growth rate
(1) Excludes non-recurring charges and extraordinary items.

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kohl's annual reports2000

  • 1. Kohl’s Corporation N56 W17000 Ridgewood Drive Menomonee Falls, WI 53051-5660 (262) 703-7000 www.kohls.com Printed on recycled paper.
  • 2. Kohl’s Corporation 2000 Annual Report that’s more like it® more growth more expansion more brands more convenience more value
  • 3. Kohl’s is a family-oriented department store. profile Contents As of April 2001, Kohl’s operates 354 family-oriented, 1 More Growth 2 Letter to Shareholders specialty department stores in 28 states that feature quality, 3 Message from Bill Kellogg national brand merchandise priced to provide exceptional 4 More Expansion value to customers. The company’s stores sell moderately 8 More Brands and Value priced brand-name apparel, shoes, accessories and home 10 More Convenience products targeted to middle income consumers shopping 12 More Community Involvement for their families and homes. Kohl’s focuses on providing 13 More Opportunities for Associates convenient shopping in neighborhood locations close to 14 Financial Highlights where our customers live and work. 15 Corporate Information
  • 4. more growth Financial Highlights Another Net Sales 2000 $ 6,152 up 35% 1999 $ 4,557 (In millions of dollars) Record Year Since going public in 1992, Kohl’s has Operating Income 2000 $ 651 up 45% 1999 $ 448 (In millions of dollars) established a record of consistently strong financial performance. On a Net Income 2000 $ 372 compounded growth rate basis up 44% 1999 $ 258 (In millions of dollars) (excluding non-recurring charges), our net income has increased 38 Diluted Net Income Per Share(1) 2000 $ 1.10 up 43% percent over the last five years and 1999 $ 0.77 33 percent since 1992. Net income increased 44 percent in 2000. This Number of Stores 2000 320 up 24% 1999 259 was the highest percentage increase in the last five years and our fifth Total Square Feet of Selling Space 2000 23,610 consecutive year of earnings growth up 26% 1999 18,757 (At year end in thousands) exceeding 30 percent. Diluted Net Income Per Share (1) Net Sales Net Income (in millions of dollars) (in millions of dollars) $6,152 $372 $1.10 26.7% 34.1% 38.2% CAGR* CAGR* CAGR* $4,557 $.77 $258 $3,682 $.59 $192 $3,060 $.45 $2,388 $141 $.34 $102 96 97 98 99 00 96 97 98 99 00 96 97 98 99 00 * Compounded annual growth rate. (1) Adjusted for stock splits in 1996, 1998 and 2000. Ko h l ’s C o r p o r a t i o n 1
  • 5. dear shareholders: Fiscal 2000 was an outstanding year for Kohl’s. Our increases in sales and income were some of our highest ever and once again, our record-breaking results far outpaced many other retailers. Our ability to deliver this consistently strong performance is the result of our focus on convenience and value for our customers, the successful execution of our expansion strategy, From left: Arlene Meier, and most importantly, the best Associates in retail. Put these together and Larry Montgomery and Kevin Mansell. you have the ‘more’ behind “That’s more like it” and the essence of all that we do. Consistently Strong Performance Thank You to From a performance standpoint, ‘more’ means exceeding our goal to Bill Kellogg increase sales and earnings by at least 20 percent each year. In 2000, net sales increased 35 percent to $6.2 billion. Net income rose 44 percent We are fortunate to have worked with to $372.2 million or $1.10 per diluted share. Kohl’s also had an excellent Bill Kellogg, who retired in January from holiday season. Fourth quarter net sales rose 38 percent and net income increased 48 percent. his day-to-day operating responsibilities. Comparable store sales increased nine percent in 2000, consistent with In the investment community, Bill is well our average over the past five years and well above the performance of our direct competitors. We remain focused on increasing our market share and known for his vision and leadership in successfully opening new stores. creating the Kohl’s concept and building Our outstanding performance has resulted in more value for our shareholders. the company from just 40 stores in 1986 to Our stock price increased from $34.41 per share at the end of 1999 to $68.48 320 at the end of 2000. Internally, Bill’s at the end of 2000. Cumulatively, a $1,000 investment in Kohl’s initial pubic support and commitment to our offering in 1992 had grown to over $39,000 at the end of fiscal 2000. Associates is legendary. His philosophy Fast-Paced Growth that ‘people make the difference’ is the ‘More’ also describes our expansion strategy. We opened 61 stores in 2000 focal point of our culture and the secret to end the year with 320 stores. This includes our successful entry into the to our success. tri-state market of New York, New Jersey and Connecticut with 35 stores. Our success in this market has exceeded our initial expectations and we plan We know we speak for everyone to continue adding fill-in stores to further strengthen our presence in this region. associated with Kohl’s in thanking Bill This year, we plan to open approximately 60 additional stores. In March for his role in Kohl’s growth, and we look and April, we opened 34 stores, including our entries into Atlanta with 15 stores, Hartford/New Haven with four stores and Fayetteville/Ft. Smith, forward to his continuing counsel as Arkansas, with three stores. This fall, we will open approximately 26 stores Chairman of the Board. and enter the new markets of El Paso, Austin and Oklahoma City. 2 Ko h l ’s C o r p o r a t i o n
  • 6. In 2002, we plan to open approximately 70 stores. We will expand fur- ther into the Northeast with a major entry into the Boston market and will enter the Houston market for the first time. In 2003, we plan to begin a major expansion into the Southwest with a significant entry into Los Angeles, giving us the coast-to-coast coverage that will move us To My Fellow from a regional to a national retailer. Plans are also currently under- way for further entries into Southern California, Arizona and Nevada in Associates: 2003 and 2004. I would like to take this opportunity to thank all of the Associates I have worked Focus on Convenience with over the years at Kohl’s. It is because of your efforts that Kohl’s is the Convenience is very important to our customer. Our ample and well-lit tremendous success it is today. I have parking, handy stroller carts, functional store layout, in-stock position always believed that Kohl’s Associates and central check-out make shopping at Kohl’s fast and easy. are exceptional. Your hard work and commitment to our customers and your In 2001, we will add on-line shopping for those customers who want company have created a unique culture the convenience of shopping from home. Our entry into e-commerce that thrives on the growth of our people has been well researched and deliberately planned to ensure our as well as our performance. customers the same level of service they have come to expect from our stores. A new fulfillment center has been built in Ohio specifically To our customers, you are Kohl’s. Whether you welcome customers to to service these customers. Effective utilization and leverage of our your store with a smile and a friendly established corporate functions provides a financially sound foundation hello, provide critical store support as for our on-line shopping business. Although e-commerce will contribute part of our distribution center team or help only a small percentage of total sales in its first year, it will complement to keep things running as a member of our existing stores and provide an added service for our busy customers. our corporate staff, you have an important role in our success. The credit for our Outstanding Associates many achievements belongs to all of you. Of course, no report on the year is complete without a thank you to the While I will continue to serve as people who made it happen – our Associates. In our business, success is Chairman of the Board, I am proud that more than buildings and merchandise. It takes great people, and whether the management transition process we they work in our stores, distribution centers or corporate office, our began in 1998 was completed in a smooth and seamless manner. With the Associates are the driving force behind all of our achievements. We are leadership of Larry Montgomery as chief proud of this outstanding group of people whose friendly service and executive officer, Kevin Mansell as caring attitude have made Kohl’s the company to watch in retailing today. president and Arlene Meier as chief operating officer, we are well positioned With coast-to-coast expansion on the horizon, the years ahead will to continue our expansion strategy. be an exciting time for Kohl’s. We want to thank all of our Associates, shareholders, customers and vendors for their continuing confidence Thank you all for a great 33 years.kuris. and support as we take Kohl’s to the next level. Bill Kellogg Larry Montgomery Kevin Mansell Arlene Meier Chairman of the Board Chief Executive Officer President Chief Operating Officer
  • 7. more expansion Expansion Kohl’s Targets the Northeast Strategy The opening of 35 stores in the tri-state market of New York, New Jersey and Connecticut in 2000 was highly successful, with results that substantially Kohl’s objective is to be a national exceeded our initial projections. With this strong start, Kohl’s has captured retailer. Our approach is very a solid share of one of the most attractive retail markets in the country. deliberate, expanding step-by-step Building on this base, we will expand into the Hartford/New Haven market into contiguous states and filling in in 2001 and make a major entry into New England in 2002. Our New existing markets. We enter major England entry will be through the acquisition of 12 former Bradlees stores new markets with a critical mass of in the Boston market and three stores in New Jersey, which we will remodel stores that enables us to establish a and reconfigure to the Kohl’s prototype. The acquisition provides an excellent presence and leverage marketing, opportunity to bring the Kohl’s shopping experience to customers in this regional management and distribution major Northeast metropolitan area. expenses. Once established, we add We will support our Northeast expansion with a new distribution center additional stores to further strengthen in New York state. Opening at the end of this year, the new center will have our market share. the capacity to serve up to 100 stores. Many of Kohl’s stores are located in New Stores in Atlanta and Arkansas the growing suburban areas of large metropolitan markets, close to the In spring 2001, we opened 34 stores, including our entry into the fast- growing Atlanta market with 15 stores. As a major population center, neighborhoods where our customers Atlanta has the ideal demographics for Kohl’s. We also entered Arkansas live and work. In developing new for the first time with three stores, further strengthening our presence in stores, we generally focus on the South Central United States. free-standing locations or power strip malls that provide the visibility, parking and ease of entry that our customers prefer. Kohl’s entered the fast-growing Atlanta market in spring 2001. 4 Ko h l ’s C o r p o r a t i o n
  • 8. more neighborhoods coast to coast Expansion Plans Over the next three years, Kohl’s expansion plans will move the company from a regional retailer to a national chain, with stores from coast to coast. We carefully research new markets to be certain we can be successful in both merchandising and operations. When we enter a new market, new store openings are preceded by an aggressive marketing program that positions Kohl’s as a brand, drives sales through highly promotional events, and supports these activities with extensive television, radio and print advertising. These highly effective targeted marketing activities have proven to be instrumental in quickly achieving the performance objectives of new stores. Growth in South Central States In fall 2001, Kohl’s will enter the new markets of El Paso and Austin, Texas, and Oklahoma City, Oklahoma. We will enter Houston with a major presence in 2002. In addition to expand- ing into new regions, we will continue to fill in existing markets including the Midwest and Mid-Atlantic regions. Moving Westward Looking ahead, we plan to begin a major expansion into the Southwest, beginning with our entry into the Los Angeles market in 2003. We plan to build on this base with additional entries in Southern California, Arizona and Nevada in 2003 and 2004. Plans are also underway for a sixth distribution center to support this growth. Our coast-to-coast presence will put Kohl’s on the map as a major national retailer. 5 Ko h l ’s C o r p o r a t i o n
  • 9.
  • 10. Existing States 2000 Expansion States 2001 Expansion States Future Expansion States Store Locations H Major Market Expansion Ko h l ’s C o r p o r a t i o n 7
  • 11. The Brands Customers Want When you look at the many attributes that make Kohl’s popular with customers, brand names are at the top of the list. With national brands accounting for the majority of our merchandise, customers know they can find the brand names they want, in today’s popular styles and colors. In 2000, we strengthened our merchandise mix with two major new brands. The Arrow line of men’s dress and sport shirts, as well as casual pants, was introduced in spring and is now available in every store. The well-known Customers count on Kohl’s for popular Columbia brand of outerwear and sportswear for both brand-name merchandise. men and women was a hit with customers from its introduction in spring to its expansion into kids in the fall. In 2001, the Columbia brand will be included in almost every major apparel and accessory classification throughout the The Kohl’s Promise store. Kohl’s own Sonoma and Croft & Barrow brands complement our brand-name merchandise in many departments throughout the store. As we continue to grow and expand into new markets, we are building Kohl’s Wide Selection of Colors and Sizes identity as a leading national retailer. Not only do customers want brand names, they also want them in a The Kohl’s brand is our promise to our variety of sizes and colors, all in stock. Kohl’s sophisticated merchandise customer. The promise of a better management program ensures that our customers find the sizes and colors they need in the style they want. Because our merchandise selection varies shopping experience. The assurance that by geographic area, seasonal items are in the stores in anticipation of her trip will be successful because we customer needs. And whether it’s basic apparel or home merchandise, have the brands she wants in the colors key items are prominently displayed for added convenience. and sizes she needs, all in stock. The promise that we will deliver more quality, Extra Services Make a Difference national brands, deep selection, value and For busy Kohl’s shoppers, the extras make a difference. Kohl’s gift cards are convenience, with less effort, time and perfect for birthdays, anniversaries or that person who has everything. Gift receipts make returns and exchanges fast and easy. Our gift registry helps hassle for her. newlyweds in furnishing their first home and provides shopping ideas for other special events. Kohl’s strong credit card program enables customers to track their purchases and provides extra benefits such as advance notice of major sales and additional savings during eight special events each year. Our “Most Valued Customer” (MVC) program continues to grow, further expanding our base of loyal customers. 8 Ko h l ’s C o r p o r a t i o n
  • 12. more brands and value Kohl’s focuses on women shopping for themselves and their families. Popular National Brand Names What differentiates Kohl’s from many of its competitors is our emphasis on brand-name merchandise. From well-known women’s apparel lines to popular athletic shoes, quality cookware and home goods, Kohl’s has the brands our customers want. Ko h l ’s C o r p o r a t i o n 9
  • 13. Centralized check-out gets busy customers quickly on their way. Focusing on Customer Needs What does convenience really mean to a Kohl’s customer? It means we’ve helped to make her shopping a lot more efficient and her life a little easier. It means she can find the brand names and selection she wants in a pleasant shopping environment close to home. It means she has more time to spend on her family, herself, or her community. Now, that’s more like it! Wide aisles and stroller carts enhance the Kohl’s shopping experience. 10 Ko h l ’s C o r p o r a t i o n
  • 14. more convenience A Pleasant Shopping Experience Our market research and customer feedback confirms what we’ve always known: customers love the convenience of Kohl’s. That’s why we’re continually looking at new ways to make the Kohl’s shopping experience even better. Why Customers Shop Kohl’s At Kohl’s, convenience begins before the customer enters the store, with a neighborhood location close to home. Ample, well-lit parking and an easily accessible entry make customers feel welcome. Inside the store, carts that double as strollers make it easy to select a variety of quality brand-name merchandise from different departments. Wide aisles and a functional store layout help customers to quickly locate the departments and Key items are prominently displayed merchandise they’re looking for. Friendly, helpful Associates and clean, for easy shopping. accessible fitting rooms further enhance the shopping experience. Fast, centralized check-out gets customers on their way, and when a size or color isn’t right, our no hassle return policy ensures a smooth Key Items exchange or refund. Drive Traffic Customers frequently plan their shopping trip around ideas found in our newspaper inserts. The inserts, along with our television and radio advertising, Merchandising is an important aspect of provide an exciting overview of our featured merchandise and special promotions. With all advertising centered around our “That’s more convenience at Kohl’s. Customers count like it” positioning, customers know Kohl’s is a unique experience. on us to always have an ample selection of key items such as shirts, denim and E-Commerce Adds Convenience khakis. Traffic for these key items, which In 2001, Kohl’s will introduce on-line shopping on our existing Web site: comprise about 10 percent of our www.kohls.com. Designed as an added service for customers who prefer to shop from their homes, the Web site will offer popular key items and best- merchandise selection, is driven by our selling family apparel and home merchandise. The site is designed to provide newspaper inserts and other advertising. an easy-to-navigate on-line shopping environment that complements the Targeted for shoppers in a hurry, the key company’s in-store focus on convenience. An added benefit for Kohl’s on-line shoppers is the ability to easily return or exchange items at any Kohl’s store. items are prominently displayed with attention-getting signage. The site will be fully integrated into other marketing activities, including our weekly newspaper inserts and advertising. Staffing will be similar to a new market entry, blending outside people who have e-commerce expertise with Kohl’s Associates who understand our philosophy and culture. Ko h l ’s C o r p o r a t i o n 11
  • 15. more community involvement Kohl’s Cares for Kids ® Kohl’s expanded its commitment to community involvement and kids with the nationwide launch of its “Kohl’s Cares for Kids” program in 2000. As an Kohl’s Associates Becky England and extension of the company’s focus on families, the Wyndell Bitner worked on holiday art multi-faceted program is designed to improve the lives projects with patients at the Carol Jo Vecchie Women and Children’s Center of children in the communities Kohl’s serves. at St. John’s Children’s Hospital in Springfield, Missouri. Supporting Children’s Hospitals This program features special seasonal merchandise, with all profits being donated to children’s hospitals in Kohl’s local communities. More than 1.3 million items were purchased through these promotions in fall and holiday 2000. Associate Fundraising Gift Cards A second component of “Kohl’s Cares Volunteer Program for Kids” is a fundraising card program. Schools and Building on Kohl’s commitment to non-profit youth organizations sell special “Kohl’s Cares for Kids” gift cards, with up to five percent of the total Associates and their communities, the purchase price going back to the community youth company’s new Associate Volunteer organization. Program encourages Associates to “Kohl’s Kids Who Care™” Knowing that kids, too, have an volunteer as teams to support local important role in making their communities a better place, the non-profit organizations that enrich the “Kohl’s Kids Who Care” program recognizes and rewards kids who contribute to their communities in special ways. Customers can nominate a lives of children in their communities. In special kid for recognition and awards, ranging from a $50 gift card for addition to the volunteer time contributed store-level winners to post-secondary education scholarships for regional by Associates, the organizations also and national winners. receive a matching grant from Kohl’s. Kohl’s focus on kids includes working with local children’s centers. Enjoying a recent visit to a center are Associates (from left) Lisa Loewus, Robert Patterson, Sue Schwenk and Sheila Schultz. 12 Ko h l ’s C o r p o r a t i o n
  • 16. more opportunities for associates A Great Place to Grow Because Kohl’s Associates are so important to our success, we strive to provide a work environment that encourages them to stay and grow with the company. In 2000, over 70 percent of our management trainees were from within the company. Our college recruitment program now includes over 45 colleges and universities. Kohl’s Core Values Kohl’s training programs also provide opportunities for growth. In 2000, over As Kohl’s continues to grow in size and 40,000 Associates participated in these programs. As a result of our fast-paced scope, management recognized the need growth, we have focused on further developing our management teams and to formalize the core values that commu- nicate the company’s goals and priorities preparing executives and Associates to efficiently open new stores in new markets. to all of our Associates across a broad geographic base. Kohl’s ideals are Commitment to Associates encompassed in three basic values: Kohl’s is committed to sharing its success with all Associates, both full- Associates - Our Associates are our and part-time. Our benefit programs provide opportunities to share financial partners in the success of the company. rewards as well as offer added security and personal convenience. Customers - We always want to ensure convenience, brand names and value. In 2000, we introduced a new medical flexible spending account to help Performance - Driving the top line and Associates reduce their medical expenses. We also implemented a low cost managing expenses produces exceptional medical insurance program for part-time Associates in recognition of their results. significant contribution to our success. And our Associate scholarship program will award more than 40 scholarships for the 2001-2002 school year. The three values, which are equal in importance, have been, and will continue Kohl’s Employee Stock Ownership Plan (ESOP) continues to to be, the drivers behind Kohl’s success. be one of our most significant benefits. The ESOP, which was started in 1992, is now valued at over $100 million, underscoring the fact that at Kohl’s, our Associates truly do make a difference. Training Programs Help Build Careers With our fast-paced expansion, Kohl’s is a great place for people who want to gain experience and advance their career. As part of the Kohl’s team, our Associates have opportunities to grow both personally and professionally. We continue to invest in computer-based training, adding to Computer-based training programs focusing on customer service, productivity and enables Associates to participate execution of our best practices. Computer-based training in classes or work on their own at programs have also been introduced at the executive levels, a time that meets their needs. giving managers rapid access to training as they need it. Ko h l ’s C o r p o r a t i o n 13
  • 17. financial highlights Fiscal Year 2000 1999 1998 1997 1996 1995 1994 1993 1992 Summary of Operations (In millions) Net sales $ 6,152 $ 4,557 $ 3,682 $ 3,060 $ 2,388 $ 1,926 $ 1,554 $ 1,306 $ 1,097 Gross margin 2,096 1,543 1,235 1,014 780 631 516 437 374 Selling, general & administrative expenses 1,282 975 810 679 536 436 357 306 269 Non-recurring charges - - - - - 14(b) - - 18 (a) Preopening expenses 35 31 16 19 10 11 8 5 3 Depreciation and amortization 127 89 70 57 44 34 27 23 20 Operating income 651 `448 338 259 189 136 (b) 124 102 65 (a) Interest expense, net 46 27 21 24 18 13 6 6 14 Income before income taxes 605 421 317 235 171 123 118 97 50 (a) Income before extraordinary items 372 258 192 141 103 73 (b) 69 56 29 (a) Diluted Earnings Per Share (c) Income before extraordinary items 1.10 .77 .59 .45 .34 .24 (b) .23 .19 .11 (a) Financial Position Data (Dollars in millions) Working capital $ 1,199 $ 732 $ 559 $ 525 $ 229 $ 175 $ 115 $ 87 $ 106 Property and equipment, net 1,727 1,353 933 750 596 409 299 187 141 Total assets 3,855 2,931 1,936 1,620 1,123 805 659 469 445 Long-term debt 803 495 311 310 312 188 109 52 95 Shareholders’ equity 2,203 1,686 1,163 955 518 411 334 263 207 Return on average shareholders’ equity 19.1 % 18.1% 18.2 % 19.2 % 22.1 % 21.7% 23.0 % 23.7 % n/a Other Data Comparable store sales growth 9.0 % 7.9 % 7.9 % 10.0 % 11.3 % 5.9 % 6.1 % 8.3 % 10.5 % Net sales per selling square foot $ 281 $ 270 $ 265 $ 267 $ 261 $ 257 $ 258 $ 255 $ 239 Gross margin (percentage of net sales) 34.1 % 33.9 % 33.5 % 33.1 % 32.7 % 32.8 % 33.2 % 33.5 % 34.1 % SG&A (percentage of net sales) 20.8 % 21.4 % 22.0 % 22.2 % 22.4 % 22.6 % 23.0 % 23.4 % 24.5 % Stores open at year end 320 259 213 182 150 128 108 90 79 Total square feet of selling space (In thousands) 23,610 18,757 15,111 12,533 10,064 8,378 6,824 5,523 4,771 Market price (c): High $ 72.20 $ 40.63 $ 33.88 $ 18.84 $ 10.50 $ 7.28 $ 6.91 $ 6.52 $ 4.36 Low 34.06 30.75 17.03 9.72 6.69 5.00 4.75 3.88 1.66 (a) The year ended January 30, 1993, includes a non-recurring incentive compensation charge of $17.7 million ($10.6 million after-tax) or $.04 per share. (b) The year ended February 3, 1996, includes a non-recurring credit operations charge of $14.1 million ($8.3 million after-tax) or $.03 per share. (c) Adjusted for stock splits in 1996, 1998 and 2000. Forward-Looking Statements Certain statements made within this report are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by the use of forward-looking terminology such as ”plans”, “believes”, “expects”, “may”, “will”, ”should”, or “anticipates” or the negative thereof or other variations thereon. Such statements are subject to certain risks and uncertainties which could cause Kohl’s actual results to differ materially from those anticipated by the forward-looking statements. These factors include, but are not limited to: competition, fluctuations in consumer demand, seasonal business trends, economic conditions, government activities and other factors as may periodically be described in Kohl’s filings with the Securities and Exchange Commission. 14 Ko h l ’s C o r p o r a t i o n
  • 18. corporate information Directors Corporate Headquarters Kohl’s Corporation Jay H. Baker—Retired President, 651 N56 W17000 Ridgewood Drive Kohl’s Corporation Menomonee Falls, Wisconsin 53051-5660 Wayne Embry—Consultant to the Cleveland (262) 703-7000 Cavaliers (a) (c) Web site: www.kohls.com 36.2% 448 James D. Ericson—President and Chief CAGR* Transfer Agent and Registrar Executive Officer, Northwestern Mutual The Bank of New York 338 Life Insurance Company (b) (c) Shareholder Relations Dept. 11-E 29.6% 259 John F. Herma—Retired Chief Operating CAGR* P.O. Box 11258 Church Street Station Officer, Kohl’s Corporation 189 New York, New York 10286 150 William S. Kellogg—Chairman of the Board, 124 (800) 524-4458 102 82 Kohl’s Corporation (c) Annual Meeting Kevin Mansell—President, Kohl’s Corporation 92 93 94 95 96 97 98 99 00 The 2001 Kohl’s Annual Meeting of Arlene Meier—Chief Operating Officer, Operating Income(1) (In millions of dollars) Shareholders will be held on Thursday, Kohl’s Corporation May 31, at 10:00 a.m. at the Four Points R. Lawrence Montgomery—Chief Executive Sheraton Hotel, Milwaukee, Wisconsin. Officer, Kohl’s Corporation Investor Information/ 372 Frank V. Sica—Managing Director, Quarterly Reports Soros Fund Management LLC (a) (b) (c) For quarterly earnings reports and other Herbert Simon—Co-Chairman, Simon Property investor information, please visit our Group, Inc. and Melvin Simon & web site at www.kohls.com or direct your 38.2% 258 CAGR* inquiries to the company, Attention: Associates (b) Shareholder Relations. Peter M. Sommerhauser—Shareholder in 192 the law firm of Godfrey & Kahn, S.C. Form 10-K 32.6% CAGR* 141 R. Elton White—Retired President, NCR Parts I–III of Kohl’s Annual Report on Form 10-K, as filed with the Securities and 102 Corporation (a) (c) Exchange Commission, are included with 81 69 56 this report for all shareholders. Executive Officers 39 John J. Lesko—Executive Vice President- Common Stock 92 93 94 95 96 97 98 99 00 Administration Kohl’s common stock is listed on the New Net Income(1) (In millions of dollars) York Stock Exchange under the symbol KSS. Rick Leto—Executive Vice President- General Merchandise Manager and Common Stock Price Range Product Development Fiscal 2000 High Low 320 Kevin Mansell—President First Quarter $ 54.78 $ 34.06 Arlene Meier—Chief Operating Officer Second Quarter 66.50 44.00 Third Quarter 64.75 49.06 R. Lawrence Montgomery—Chief Executive 259 Fourth Quarter 72.20 48.44 Officer 20.9% 213 CAGR* Jack E. Moore, Jr.—Executive Vice President- Fiscal 1999 High Low 182 General Merchandise Manager First Quarter $ 39.00 $ 31.38 Second Quarter 40.63 31.75 150 Don Sharpin—Executive Vice President- 19.1% 128 Third Quarter 39.97 30.75 CAGR* Human Resources 108 Fourth Quarter 39.22 31.47 Gary Vasques—Executive Vice President- 90 79 Marketing Shareholders As of March 19, 2001, there were 6,128 holders of record of Kohl’s common stock. (a) Audit Committee 92 93 94 95 96 97 98 99 00 (b) Compensation and Stock Option Committee (c) Nominating Committee Stores Open at Year End Ko h l ’s C o r p o r a t i o n 15 * Compounded annual growth rate (1) Excludes non-recurring charges and extraordinary items.