As it took fast and aggressive steps to respond to the pandemic, steps that resulted in positive operating cash flow, Kohl’s reported a first quarter net sales drop of 43.5 percent. The retailer, however, said it grew its financial flexibility during the quarter, which it concluded with $2 billion in cash, according to an announcement.
Kohl’s Chief Executive Officer Michelle Gass said in the earnings announcement, “We entered the year in a strong financial position and our business was tracking to our expectations prior to the onset of the crisis. We immediately responded with actions to protect the health and safety of our associates and customers and to preserve our financial position. I am incredibly proud of how our associates stepped up to face this unprecedented challenge with speed and agility.”
Gass continued, “Our actions to manage cash outflow and increase liquidity have been instrumental in enhancing our position to navigate this crisis, and we believe our history of prudent capital management will continue to serve us well.”
Kohl’s said it sizably cut expenses throughout the business and reduced its planned capital expenditures by roughly $500 million. It also halted its share repurchase program and suspended its regular quarterly cash dividend starting in Q2 2020. The company also managed inventory receipts “meaningfully lower,” put forward $600 million in notes due 2025 and replaced as well as upsized revolver to a $1.5 billion secured facility.
Gass noted that the company started the rebuilding process, and it had recently opened approximately half of its locations throughout the nation again. “In doing so, we have taken special care to equip our stores with the latest health and safety measures as we welcome back our associates and customers,” the executive noted.
Kohl’s Corporation reported revenues of $2.4 billion and adjusted diluted loss per share of $3.20 compared to analyst estimates of $2.2 billion and $1.75. Shares of the retailer had fallen more than 7 percent as of approximately 10:15 a.m. Eastern Time.