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| Statement |
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| Tom also mentioned, we saw our Valentine's Day business do incredibly well |
| In the quarter, digital sales trends improved as the quarter progressed, with December and January down mid-single digits percent to last year, which gives us confidence as we look to 2024 |
| In the quarter, store sales were driven by strong performance from Sephora at Kohl's and growth in the home category |
| Another thing to point out and we talk about Sephora, we actually continue to see really great strength in Sephora |
| And then one thing I'm really excited about is what we're doing in our home business |
| We are excited to see our actions build further momentum in 2024 and beyond |
| In 2024, we expect to drive further gross margin expansion, and we will tightly manage expenses, resulting in another solid year of cash flow generation, which will provide us opportunities to further reduce our debt and overall leverage |
| We will also improve the performance of our apparel and footwear assortments through greater product relevance and more simplified pricing |
| Sephora at Kohl's continued to drive meaningful beauty sales growth |
| We managed inventory down 10% at year end and we delivered 2023 earnings ahead of our expectations |
| I mean we just feel really, really good about it |
| We accomplished a great deal in 2023 and while there is more work to be done, I am confident that, through our collective efforts, Kohl's is becoming more relevant to customers |
| Collectively, these actions have positioned the company for improved sales in 2024 and beyond |
| The Sephora collection is doing extremely well and Rare Beauty |
| Incremental sales from our home, gifting and impulse initiatives, the initial sales benefit from our partnership with Babies R Us through which we will meaningfully expand our presence in the Baby Gear category, the scaling of our key value initiative, which is high volume pricing across our private brands building off the success of our test last fall, and improved performance across our apparel and footwear assortment as our efforts to increase relevance come to life in our existing brands as well as new brands |
| From a profitability perspective, as Jill will discuss in more detail, we expect strong inventory management to drive further gross margin expansion in 2024 and we plan to continue to benefit from disciplined expense management |
| However, January was better than our plan |
| Another positive was that, we drove increased regular price sales in December and January through the delivery of transitional goods |
| And from an expense perspective, we reduced Q4 SG&A 4%, which was slightly better than our expectation |
| With stores comparable sales down 1% in Q4, we saw continued strong results from Sephora as well as our initiatives in holiday gifting and home decor |
| So we feel like we're positioned well to achieve that |
| Beyond the top-line, we are able to successfully manage gross margin and expenses to achieve an operating margin of 5% in Q4 and 4.1% for the full year, slightly ahead of our guidance outlook |
| Sephora has done a phenomenal job helping us with that |
| During Q4, we showed strong inventory and expense management |
| In terms of store openings, you know we have an incredibly healthy store base that we feel great with the fleet we have |
| So that's a pretty good accomplishment that that's working in the right direction |
| We see incremental credit revenue from the Kohl's brand card growing to between $250 million to $300 million annually by 2025 |
| We are also strengthening our loyalty offering |
| We also successfully tested high-volume pricing on 30% of our private brand offering throughout the back half of 2023 |
| As far as growth goes, we feel very confident about being able to hit our guidance of 0% to plus 2% |
| Statement |
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| Comparable sales, which exclude $164 million of sales from the 53rd week, declined 4.3% in Q4 and 4.7% for the year |
| Digital sales, excluding the 53rd week, declined 10% in Q4 and 15% for the full year |
| Net sales declined 1.1% in Q4 and 3.4% for the year |
| Digital sales excluding the 53rd week were down approximately 10% in the quarter |
| December comparable sales were flat to last year and January sales were down, as we lapped elevated clearance activity from the prior year |
| Net sales decreased 1.1% in Q4 and comparable sales, which exclude sales from the 53rd week decreased 4.3% |
| That said, we have embedded the potential impact of the recent CFPB late fee ruling into our 2024 outlook, which will serve as a headwind in the back half of this year |
| I think from the fourth quarter, and quite honestly, our biggest issue from comp perspective has been traffic |
| What kind of closing do they want? And how are you executing to become more trend-relevant? And Jill, as we look at the model throughout the year, the gross margin compare gets tougher, given great execution there |
| For the full year, other revenue declined 5% |
| As it relates to Q1, we expect comparable sales to be at the lower end of our annual guidance as we lap last year's clearance activity and as our initiatives build throughout the year |
| The holiday period started off mixed with November being the weakest month in the quarter, due in part to warmer weather |
| Obviously, it’s a build, so as we gave the guidance with other revenue being down mid-teens for the year and only down mid-single digits in the front half of the year, the bulk of that headwind comes in the back half |
| It's really been around our traffic that's been down, and that's been pretty consistent |
| And I think you've seen that throughout the year that we're really committed to that inventory management being down 10% and, as we mentioned on the call, being down again, mid-single digits in 2024 |
| So with all that said, it's hard not to feel very confident about our growth in 2024 |
| Inventory was down 10% compared to last year |
| Over time, we've really reduced our product offering in dress and casual, so we're primarily athletic |
| For the full year, SG&A decreased 1.3% |
| As compared to last year, depreciation expense declined $13 million and $59 million, respectively, driven by reduced technology capital spend |
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