Kohl’s Launches Five-Year Growth Plan
Menomonee Falls, Wis., Kohl’s is planning to “right size” the organization—the right size being twice as big as it right now.
“By the end of 2010, we will have almost doubled the number of stores we currently operate, doubled our sales and generated net income of over 2.5 times the net income generated in 2004,’ said Larry Montgomery, Kohl’s chairman and CEO. By the end of fiscal year 2010, Kohl’s plans to operate over 1,200 stores, achieving sales of approximately $24 billion and net income of approximately $1.9 billion.
The company today announced plans to open approximately 500 stores for the five-year period from 2006 through 2010. The expansion plans continue to be a combination of new builds and acquired locations.
Also on tap is a new prototype design, to be introduced in 2006. The prototype is being designed to create excitement and promote ease of shopping.
As part of the initiative to create a more exciting in-store shopping experience and better merchandise by lifestyle, Kohl’s announced that it is modifying its prototype design. The improvements are being designed to create excitement and advance ease of shopping. This new design will be introduced in the fall of 2006.
In spring 2006, Kohl’s will launch Stamp 10 for men and women, an exclusive contemporary brand in partnership with Liz Claiborne Inc. The Company also announced several new initiatives for the home. Kohl’s will extend its successful Nine & Co. brand into home this fall and its Apt. 9 and Candies brands in spring of 2006.
The company currently operates 670 stores in 40 states.
Wal-Mart Disappointed With 5.8% Growth
Bentonville, Ark., Wal-Mart Stores, Inc. reported record second-quarter sales and earnings for the quarter ended July 31, 2005. Net sales were $76.8 billion, an increase of 10.2% over the second quarter of fiscal 2004. Net income for the quarter was $2.8 billion, an increase of 5.8% from $2.7 billion in the prior-year quarter.
Still, the quarter revealed the most modest growth in four years, disappointing company executives. Lee Scott, president and CEO, said, “Early in the quarter, our results were disappointing; however, July came in stronger than expected. Wal-Mart Stores did miss their plan as our customer continues to be impacted by higher gas prices and it is difficult to improve our expense leverage in the current environment.”
Total U.S. comparable sales for the quarter increased 3.5%, which is represented by a 3.6% comp increase for Wal-Mart Stores and a 2.9% comp increase for Sam’s Club. Total U.S. comparable sales for the six-month period were up 3.2%, which is comprised of a 3.2% comp increase for Wal-Mart Stores and a 3.2% comp increase for Sam’s Club.
Net sales for the six months ended July 31 were $147.7 billion, an increase of 9.8% over the first six months of fiscal 2005. Net income for the six months increased 9.3% to a record $5.3 billion, up from $4.8 billion in the same prior-year period. Net income for the six months was favorably impacted by two items totaling $145 million after tax or $0.03 per share: an increase due to favorable tax resolutions of $77 million and positive legal developments of $68 million after-tax.
Tuesday Afternoon Earnings Roundup
Seattle, Nordstrom Inc. recorded net earnings of $148.9 million in the second quarter, up from $106.9 million a year ago. Total sales rose 7.8% to $2.1 billion on a comps increase of 6.2%.
• Staples Inc. recorded a 20% gain in second-quarter net income to $147 million. Revenues increased 12% to $3.47 billion for the quarter, supported by 3% comps growth.
• Abercrombie & Fitch posted a 34% increase in net income to $57.4 million in the second quarter. Company net sales rose 42% to $571.6 million on same-store sales growth of 30%.
• Borders Group Inc. reported consolidated net income of $1.3 million in the second quarter, down from $7.9 million in the year-ago period. The retailer attributed the shortfall to the cost of strategic investments. However, consolidated sales increased 5.3% in the quarter to $891.6 million on same-store sales growth of 1.8% and 1.9% at Borders superstores and the Waldenbooks division, respectively.
• Dick’s Sporting Goods Inc. announced second-quarter net income of $22.1 million, up from $17.9 million in the year-ago period. Dick’s recent performance was impacted by after-tax merger integration and store closing costs of $3.2 million and an after-tax gain on sale of investment of $1.1 million. Sales increased 50% to $622 million. Same-store sales rose 0.5%.
• Wilsons The Leather Experts announced a net loss of $14 million in the second quarter, as compared to a net loss of $30.4 million in the same quarter of 2004. Net sales increased 5.6% to $58.4 million, supported by comps growth of 8.7%.
• Cato Corp. posted net income of $10.7 million in the second quarter vs. $8.1 million in the same quarter of 2004. Sales increased 6% to $208.3 million. Same-store sales remained flat.
• Books-A-Million Inc. posted second-quarter net income of $1.7 million, up from $989,000 year-over-year. Net sales rose 7.9% to $122.4 million on same-store sales growth of 4.4%.