Kohl’s Provides Key Updates on Strategic Growth Initiatives and Financial Plan

Kohl’s Corporation (NYSE: KSS) (“Kohl’s” or the “Company”) today will host a virtual Investor Day during which it will provide an update on the Company’s strategy to drive growth and become the retailer of choice for the Active and Casual lifestyle. Kohl’s will also announce an updated long-term financial framework.

“Kohl’s is undergoing a significant transformation of our business model and brand to be the retailer of choice for the Active and Casual lifestyle. We have fundamentally restructured our business to drive sustainable and profitable growth, while providing a strong return to shareholders,” said Michelle Gass, Kohl’s chief executive officer. “We have laid the foundation for our winning strategy and have started to implement key initiatives that will scale and accelerate our growth in the years ahead. We delivered record EPS in 2021 and achieved our operating margin goal two years ahead of schedule, reflecting our progress to drive more profitable growth. The initiatives we are announcing today, including plans to drive the Sephora business to $2 billion, are further positioning us for long-term value creation.”

During the Investor Day, Kohl’s executives will detail near- and long-term strategic initiatives to accelerate profitable growth, including:

Differentiated Position in Retail

Kohl’s owns a differentiated position in retail and is evolving to be a focused lifestyle concept, centered around the Active and Casual lifestyle. Kohl’s is modernizing its brand and offerings to fit the unique needs for how people are living today and for the future by:

Driving continued growth in Active and Casual categories;
Reigniting Women’s through significantly growing Kohl’s dress business, expanding outdoor and swim categories, and amplifying Kohl’s inclusivity offering;
Elevating and modernizing the experience for customers, continuing store refreshes and launching innovation zones, which will inspire curations of cross-category product and brands with a focus on diverse-owned brands; and
Maintaining leadership in loyalty by enhancing Kohl’s Card Rewards earn to 7.5% every day, and introducing a co-branded credit card in 2023.
Compelling Partnerships

Kohl’s has compelling partnerships that are unique in the industry. These partnerships build on Kohl’s innovative, bold and disruptive spirit and provide differentiated experiences that attract customers to Kohl’s through:

Growing Sephora to a $2 billion business through an expanded store rollout to 850 stores and continued innovation to drive customer growth and engagement;
Continuing to acquire millions of new customers with Amazon Returns; and
Being a destination for iconic national brands and continuing to enhance the portfolio consistent with the Company’s strategy.
Expanding Kohl’s Omnichannel Reach

Kohl’s has a large national store fleet and will build on its strong and growing base of 65 million customers by expanding its store portfolio, building its digital business, and increasing relevancy to attract more customers through:

Opening more than 100 new smaller format Kohl’s stores over the next four years;
Growing the digital business to $8 billion by enhancing discovery and shopability on Kohls.com;
Rolling out self-serve buy online, pick up in store to all stores in 2022, and continuing to test self-serve returns and check-out; and
Expanding Kohl’s Media Network as a way to leverage the Company’s strong omnichannel capability.
Leveraging Data Science

Kohl’s is a data-centric companyand is taking additional steps to increase its data science capabilities to help engage with customers more efficiently and provide greater relevance by:

Using data science to increase personalization and accelerate localization to its entire store fleet over the next two years; and
Optimizing data and analytics to create more relevant customer experiences, drive higher revenue, higher margin, and greater asset efficiency.
Delivering Shareholder Value

Kohl’s is introducing a long-term financial framework that is focused on delivering shareholder value by delivering:

Low-single digits percent sales growth;
7% to 8% operating margin;
Mid-to-high single digits percent EPS growth; and
Operating cash flow of more than $5.5 billion and approximately $2.5 billion of free cash flow during 2022-2024.
Capital Allocation Plans

Kohl’s remains committed to returning significant capital to shareholders while investing in initiatives to drive organic growth. As announced during its Q4 2021 earnings call last week, the Company increased its dividend by 100%, which equates to an annual dividend of $2.00 per share and authorized a new $3 billion share repurchase program. In 2022, the Company plans to repurchase at least $1.0 billion dollars, demonstrating confidence in its business and key strategic initiatives.

Long-standing Commitment to Environment, Social and Governance (ESG)

Kohl’s reiterated its long-standing commitment to ESG stewardship. Kohl’s is committed to creating sustainable solutions, giving back to the community and building on diversity and inclusion efforts across the business. The Company announced plans by 2025 to reach Net Zero emissions and enhanced its goal to triple its spend with diverse suppliers. More details on ESG goals and initiatives will be shared in the company’s ESG report published next month and will include TCFD and SASB reporting.

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