Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by a check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: ~~November~~August 26, ~~2021~~2022 Common Stock, Par Value $0.01 per Share, ~~139,158,063~~116,638,020 shares outstanding.


(Dollars in Millions)	October 30, 2021	January 30, 2021	October 31, 2020	July 30, 2022	January 29, 2022	July 31, 2021
Assets
Current assets:
Cash and cash equivalents	$1,873	$2,271	$1,939	$222	$1,587	$2,569
Merchandise inventories	3,642	2,590	3,607	4,034	3,067	2,733
Other	373	974	450	374	369	356
Total current assets	5,888	5,835	5,996	4,630	5,023	5,658
Property and equipment, net	7,329	6,689	6,876	8,228	7,304	7,107
Operating leases	2,293	2,398	2,422	2,296	2,248	2,301
Other assets	441	415	150	469	479	440
Total assets	$15,951	$15,337	$15,444	$15,623	$15,054	$15,506

Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable	$2,135	$1,476	$2,184	$1,497	$1,683	$1,495
Accrued liabilities	1,545	1,270	1,272	1,426	1,340	1,554
Borrowings under revolving credit facility				79	—
Current portion of:
Finance lease and financing obligations	117	115	127
Long-term debt				164	—
Finance leases and financing obligations				96	118	117
Operating leases	142	161	160	108	145	143
Total current liabilities	3,939	3,022	3,743	3,370	3,286	3,309
Long-term debt	1,909	2,451	2,450	1,747	1,910	1,909
Finance lease and financing obligations	2,072	1,387	1,402
Finance leases and financing obligations				2,830	2,133	1,906
Operating leases	2,537	2,625	2,644	2,568	2,479	2,532
Deferred income taxes	196	302	74	194	206	245
Other long-term liabilities	367	354	293	370	379	386
Shareholders’ equity:
Common stock	4	4		4	4
Paid-in capital	3,362	3,319	3,303	3,406	3,375	3,349
Treasury stock, at cost	(12,426)	(11,595)	(11,594)	(13,151)	(12,975)	(11,920)
Retained earnings	13,991	13,468	13,125	14,285	14,257	13,786
Total shareholders’ equity	$4,931	$5,196	$4,838	$4,544	$4,661	$5,219
Total liabilities and shareholders’ equity	$15,951	$15,337	$15,444	$15,623	$15,054	$15,506


	Three Months Ended		Nine Months Ended		Three Months Ended		Six Months Ended
(Dollars in Millions, Except per Share Data)	October 30, 2021	October 31, 2020	October 30, 2021	October 31, 2020	July 30, 2022	July 31, 2021	July 30, 2022	July 31, 2021
Net sales	$4,366	$3,779	$12,251	$9,152	$3,863	$4,223	$7,334	$7,885
Other revenue	234	200	683	662	224	224	468	449
Total revenue	4,600	3,979	12,934	9,814	4,087	4,447	7,802	8,334
Cost of merchandise sold	2,623	2,424	7,282	6,360	2,332	2,426	4,472	4,659
Operating expenses:
Selling, general, and administrative	1,380	1,302	3,791	3,418	1,283	1,241	2,576	2,411
Depreciation and amortization	210	210	631	656	206	210	406	421
Impairments, store closing, and other costs	0	21	0	85
(Gain) on sale of real estate	0	0	0	(127)
Operating income (loss)	387	22	1,230	(578)
Operating income					266	570	348	843
Interest expense, net	66	78	195	214	77	62	145	129
Loss on extinguishment of debt	0		201	0	—			201
Income (loss) before income taxes	321	(56)	834	(792)
Provision (benefit) for income taxes	78	(44)	195	(286)
Net income (loss)	$243	$(12)	$639	$(506)
Net income (loss) per share:
Income before income taxes					189	508	203	513
Provision for income taxes					46	126	46	117
Net income					$143	$382	$157	$396
Net income per share:
Basic	$1.67	$(0.08)	$4.24	$(3.28)	$1.13	$2.51	$1.24	$2.58
Diluted	$1.65	$(0.08)	$4.19	$(3.28)	$1.11	$2.48	$1.22	$2.55


	Three Months Ended		Nine Months Ended		Three Months Ended		Six Months Ended
(Dollars in Millions, Except per Share Data)	October 30, 2021	October 31, 2020	October 30, 2021	October 31, 2020	July 30, 2022	July 31, 2021	July 30, 2022	July 31, 2021
Common stock
Balance, beginning of period	$4	$4	$4	$4	$4	$4	$4	$4
Stock-based awards	—	—	—	—	—	—	—	—
Balance, end of period	$4	$4	$4	$4	$4	$4	$4	$4

Paid-in capital
Balance, beginning of period	$3,349	$3,290	$3,319	$3,272	$3,395	$3,333	$3,375	$3,319
Stock-based awards	13	13	43	31	11	16	31	30
Balance, end of period	$3,362	$3,303	$3,362	$3,303	$3,406	$3,349	$3,406	$3,349

Treasury stock, at cost
Treasury stock
Balance, beginning of period	$(11,920)	$(11,594)	$(11,595)	$(11,571)	$(13,150)	$(11,663)	$(12,975)	$(11,595)
Treasury stock purchases	(506)	—	(807)	(8)	—	(255)	(158)	(301)
Stock-based awards	(1)	—	(26)	(21)	(2)	(3)	(20)	(25)
Dividends paid	1	—	2	6	1	1	2	1
Balance, end of period	$(12,426)	$(11,594)	$(12,426)	$(11,594)	$(13,151)	$(11,920)	$(13,151)	$(11,920)

Retained earnings
Balance, beginning of period	$13,786	$13,137	$13,468	$13,745	$14,207	$13,443	$14,257	$13,468
Net income (loss)	243	(12)	639	(506)
Net income					143	382	157	396
Dividends paid	(38)	—	(116)	(114)	(65)	(39)	(129)	(78)
Balance, end of period	$13,991	$13,125	$13,991	$13,125	$14,285	$13,786	$14,285	$13,786

Total shareholders' equity, end of period	$4,931	$4,838	$4,931	$4,838	$4,544	$5,219	$4,544	$5,219

Common stock
Shares, beginning of period	377	377	377	375	377	377	377	377
Stock-based awards	—	—	—	2	—	—	—	—
Shares, end of period	377	377	377	377	377	377	377	377
Treasury stock
Shares, beginning of period	(225)	(219)	(219)	(219)	(249)	(220)	(246)	(219)
Treasury stock purchases	(10)	—	(16)	—	—	(5)	(3)	(6)
Shares, end of period	(235)	(219)	(235)	(219)	(249)	(225)	(249)	(225)
Total shares outstanding, end of period	142	158	142	158	128	152	128	152

Dividends paid per common share	$0.25	—	$0.75	$0.704	$0.50	$0.25	$1.00	$0.50


	Nine Months Ended		Six Months Ended
(Dollars in Millions)	October 30, 2021	October 31, 2020	July 30, 2022	July 31, 2021
Operating activities
Net income (loss)	$639	$(506)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Net income			$157	$396
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Depreciation and amortization	631	656	406	421
Share-based compensation	35	26	26	25
Deferred income taxes	(103)	(181)	(12)	(57)
Impairments, store closing, and other costs	—	49
(Gain) on sale of real estate	—	(127)
Loss on extinguishment of debt	201	—	—	201
Non-cash inventory costs	—	187
Non-cash lease expense	107	111	56	74
Other non-cash expense	10	15	5	9
Changes in operating assets and liabilities:
Merchandise inventories	(1,044)	(251)	(964)	(138)
Other current and long-term assets	574	(45)	(29)	590
Accounts payable	659	978	(185)	19
Accrued and other long-term liabilities	172	111	51	228
Operating lease liabilities	(107)	(113)	(57)	(76)
Net cash provided by operating activities	1,774	910
Net cash (used in) provided by operating activities			(546)	1,692
Investing activities
Acquisition of property and equipment	(426)	(264)	(548)	(191)
Proceeds from sale of real estate	35	194	4	4
Net cash used in investing activities	(391)	(70)	(544)	(187)
Financing activities
Proceeds from issuance of debt	500	2,097	—	500
Net borrowings under revolving credit facility			79	—
Deferred financing costs	(8)	(19)	—	(5)
Treasury stock purchases	(807)	(8)	(158)	(301)
Shares withheld for taxes on vested restricted shares	(26)	(21)	(20)	(25)
Dividends paid	(114)	(108)	(127)	(77)
Reduction of long-term borrowings	(1,044)	(1,497)	—	(1,044)
Premium paid on redemption of debt	(192)	—	—	(192)
Finance lease and financing obligation payments	(96)	(72)	(55)	(65)
Proceeds from financing obligations			5	4
Proceeds from stock option exercises	1	—	1	1
Proceeds from financing obligations	8	4
Other	(3)	—	—	(3)
Net cash (used in) provided by financing activities	(1,781)	376
Net cash used in financing activities			(275)	(1,207)
Net (decrease) increase in cash and cash equivalents	(398)	1,216	(1,365)	298
Cash and cash equivalents at beginning of period	2,271	723	1,587	2,271
Cash and cash equivalents at end of period	$1,873	$1,939	$222	$2,569
Supplemental information
Interest paid, net of capitalized interest	$167	$159	$137	$128
Income taxes paid	221	138	49	43

1. Basis of Presentation

The accompanying Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for fiscal year end Consolidated Financial Statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. For further information, refer to the Consolidated Financial Statements and related footnotes included in our Annual Report on Form 10-K for the fiscal year ended January ~~30, 2021~~29, 2022 (Commission File No. 1-11084) as filed with the Securities and Exchange Commission.

Due to the seasonality of the business of Kohl’s Corporation (the “Company,” “Kohl’s,” “we,” “our,” or “us”) ~~and the uncertainty surrounding the financial impact of the novel coronavirus (“COVID-19”) pandemic,~~, results for any quarter are not necessarily indicative of the results that may be achieved for a full fiscal year.

We operate as a single business unit.

Recent Accounting Pronouncements

We ~~adopted~~ ~~the new~~do not expect that any recently issued accounting ~~standard on simplifying the accounting for income taxes (ASU 2019-12~~), effective at the beginning of fiscal 2021. The transition method (retrospective, modified retrospective, or prospective basis) related to the amendments depends on the applicable guidance, and all amendments for which there is no transition guidance specified are to be applied onpronouncements will have a ~~prospective basis. There was~~ no material impact on our ~~financial statements due to adoption of the new standard.~~Consolidated Financial Statements.

2. Revenue Recognition

The following table summarizes net sales by line of business:


	Three Months Ended		Nine Months Ended		Three Months Ended		Six Months Ended
(Dollars in Millions)	October 30, 2021	October 31, 2020	October 30, 2021	October 31, 2020	July 30, 2022	July 31, 2021	July 30, 2022	July 31, 2021
Women's	$1,165	$1,025	$3,626	$2,569	$1,239	$1,344	$2,316	$2,461
Men's	933	711	2,562	1,672	865	942	1,575	1,629
Home	680	700	1,923	1,840	502	609	1,027	1,243
Accessories					458	403	848	771
Children's	678	593	1,609	1,257	414	463	825	931
Footwear	476	389	1,326	959	385	462	743	850
Accessories	434	361	1,205	855
Net Sales	$4,366	$3,779	$12,251	$9,152	$3,863	$4,223	$7,334	$7,885

Unredeemed gift cards and merchandise return card liabilities totaled $~~273~~294 million as of ~~October~~July 30, ~~2021,~~2022, $~~339~~353 million as of January ~~30, 2021,~~29, 2022, and $~~272~~281 million as of ~~October~~July 31, ~~2020. Revenue~~2021. In the second quarter of 2022 and 2021, net sales recognized from gift cards redeemed in the current period and issued in prior years totaled $39 million and $38 million, respectively. Year to date 2022 and 2021, net sales of $~~138~~113 million ~~was~~and $110 million, respectively, were recognized during the current period from gift cards redeemed during the current year ~~from the January 30, 2021 ending balance.~~and issued in prior years.

3. Debt

Borrowings under the revolving credit facility, recorded as short-term debt, has $79 million outstanding as of July 30, 2022. No amounts were outstanding at January 29, 2022 or July 31, 2021.

Long-term debt, which ~~includes draws~~excludes borrowings on the revolving credit facility, consists of the following unsecured debt:


			Outstanding					Outstanding
Maturity (Dollars in Millions)	Effective Rate	Coupon Rate	October 30, 2021	January 30, 2021	October 31, 2020	Effective Rate	Coupon Rate	July 30, 2022	January 29, 2022	July 31, 2021
2023	3.25%		$164	$350		3.25%		$164	$164
2023	4.78%	4.75%	111	184		4.78%	4.75%	111	111
2025	9.50%		113	600		9.50%		113	113
2025	4.25%		353	650		4.25%		353	353
2029	7.36%	7.25%	42	42		7.36%	7.25%	42	42
2031	3.40%	3.38%	500	—		3.40%	3.38%	500	500
2033	6.05%	6.00%	112	113		6.05%	6.00%	112	112
2037	6.89%	6.88%	101	101		6.89%	6.88%	101	101
2045	5.57%	5.55%	427	427		5.57%	5.55%	427	427
Outstanding unsecured senior debt			1,923	2,467				1,923	1,923
Unamortized debt discounts and deferred financing costs			(14)	(16)	(17)			(12)	(13)	(14)
Unsecured senior debt			$1,909	$2,451	$2,450
Current portion of unsecured senior debt								(164)	—
Long-term unsecured senior debt								$1,747	$1,910	$1,909
Effective interest rate			4.89%	5.90%				4.89%	4.89%

Our unsecured senior long-term debt is classified as Level 1, financial instruments with unadjusted, quoted prices listed on active market exchanges. The estimated fair value of our unsecured senior debt was $~~2.1~~1.7 billion at ~~October~~July 30, ~~2021,~~2022, $~~2.8~~2.0 billion at January ~~30, 2021,~~29, 2022, and $~~2.6~~2.2 billion at ~~October~~July 31, ~~2020.~~

~~In March 2021, we issued $500~~ ~~million in aggregate principal amount of~~ ~~3.375% notes with~~ ~~semi-annual~~ ~~interest payments beginning in~~ ~~November 2021. The notes include coupon rate step ups if our long-term debt is downgraded to below a BBB- credit rating by S&P Global Ratings or Baa3 by Moody’s Investors Service, Inc. The notes mature in~~ ~~May 2031. Proceeds of the issuance and cash on hand were used to pay the principal, premium, and accrued interest of the notes which were purchased as part of the cash tender offer in April~~ 2021.

~~In April 2021, we completed a cash tender offer for $1.0~~ ~~billion of senior unsecured debt. We recognized a $201~~ ~~million loss on extinguishment of debt in the first quarter of 2021, which includes the $192~~ ~~million tender premium paid to tendering note holders in accordance with the terms of the tender offer, a $~~6 ~~million non-cash write-off of deferred financing costs and original issue discounts associated with the extinguished debt, and $~~3 ~~million in other fees.~~

~~In October 2021, we entered into a Credit Agreement with various lenders which provides for a $1.0~~ ~~billion senior unsecured~~ ~~five-year~~ ~~revolving credit facility that will mature in~~ ~~October 2026~~ and replaces our existing senior secured revolving credit facility. Among other things, the agreement includes a maximum leverage ratio financial covenant and restrictions on liens and subsidiary indebtedness, all of which are generally consistent with the prior 2019 senior unsecured ~~five-year~~ ~~revolving credit facility. We may request an increase in revolving credit commitments under the facility of up to $500~~ ~~million in certain circumstances. Events of default under the Credit Agreement include, among other things, a change of control of the Company and the Company’s default on other debt exceeding $~~75 ~~million.~~ ~~NaN~~ ~~borrowings were outstanding on the credit facility in place as of October 30, 2021, January 30, 2021, or October 31, 2020.~~

Our various debt agreements contain covenants including limitations on additional indebtedness and certain financial tests. As of ~~October~~July 30, ~~2021,~~2022, we were in compliance with all covenants of the various debt agreements.

4. Leases

We lease certain property and equipment used in our operations. Some of our store leases include additional rental payments based on a percentage of sales over contractual levels or which are adjusted periodically for inflation. Our typical store lease has an initial term of 20 to 25 years and four to eight five-year renewal options.

Lease assets represent our right to use an underlying asset for the lease term. Lease assets are recognized at commencement date based on the value of the lease liability and are adjusted for any lease payments made to the lessor at or before commencement date, minus any lease incentives received and any initial direct costs incurred by the lessee.

Lease liabilities represent our contractual obligation to make lease payments. At the commencement date, the lease liabilities equal the present value of minimum lease payments over the lease term. As the implicit interest rate is not readily identifiable in our leases, we estimate our collateralized borrowing rate to calculate the present value of lease payments.

Leases with a term of 12 months or less are excluded from the balance; we recognize lease expense for these leases on a straight-line basis over the lease term. We combine lease and non-lease components for new and modified leases.

WeDuring the first half of 2022, we opened ~~200~~340 Sephora shop-in-shops within our Kohl's stores and now have a total of 540 open as of the end of the second quarter. We plan to open an additional 60 shop-in-shops during the remainder

Table of Contents

of 2022, as well as at least 250 more shops in 2023. We are also working with Sephora to have a Sephora presence in the ~~fall of 2021.~~remaining approximately 300 stores. Due to the investments we ~~made~~are making in the shop-in-shops, we reassessed our lease term when construction began as these assets will have significant economic value to us when the lease term becomes exercisable. The impact of these assessments resulted in additional lease term, additional lease assets and liabilities, and, in some cases, changes to the classification.

The following tables summarize our operating and finance leases and where they are presented in our Consolidated Financial Statements:


Consolidated Balance Sheets	Consolidated Balance Sheets			Consolidated Balance Sheets
(Dollars in Millions)	Classification	October 30, 2021	January 30, 2021	Classification	July 30, 2022	January 29, 2022	July 31, 2021
Assets
Operating leases	Operating leases	$2,293	$2,398	Operating leases	$2,296	$2,248	$2,301
Finance leases	Property & equipment, net	1,389	708	Property and equipment, net	2,114	1,442	1,226
Total operating & finance leases		3,682	3,106
Total operating and finance leases				Total operating and finance leases	4,410	3,690	3,527
Liabilities
Current
Operating leases	Current portion of operating leases	142	161	Current portion of operating leases	108	145	143
Finance leases	Current portion of finance leases & financing obligations	86	76	Current portion of finance leases and financing obligations	78	87	83
Noncurrent
Operating leases	Operating leases	2,537	2,625	Operating leases	2,568	2,479	2,532
Finance leases	Finance leases & financing obligations	1,620	926	Finance leases and financing obligations	2,381	1,688	1,457
Total operating & finance leases		$4,385	$3,788
Total operating and finance leases				Total operating and finance leases	$5,135	$4,399	$4,215


Consolidated Statement of Operations	Consolidated Statement of Operations	Three Months Ended	Nine Months Ended	Consolidated Statement of Operations	Three Months Ended		Six Months Ended
(Dollars in Millions)	Classification	October 30, 2021		Classification	July 30, 2022	July 31, 2021	July 30, 2022	July 31, 2021
Operating leases	Selling, general, and administrative	$71	$227	Selling, general, and administrative	$64	$79	$133	$156
Finance Leases
Finance leases
Amortization of leased assets	Depreciation and amortization	27	70	Depreciation and amortization	32	23	61	43
Interest on leased assets	Interest expense, net	29	81	Interest expense, net	36	27	68	52
Total operating & finance leases		$127	$378
Total operating and finance leases					$132	$129	$262	$251

~~Table of Contents~~


~~Consolidated Statement of Cash Flows~~	~~Nine Months Ended~~
~~(Dollars in Millions)~~	~~October 30, 2021~~
~~Cash paid for amounts included in the measurement of leased liabilities~~
~~Operating cash flows from operating leases~~	$~~236~~
~~Operating cash flows from finance leases~~	81
~~Financing cash flows from finance leases~~	71


Consolidated Statement of Cash Flows	Six Months Ended
(Dollars in Millions)	July 30, 2022	July 31, 2021
Cash paid for amounts included in the measurement of leased liabilities
Operating cash flows from operating leases	$135	$165
Operating cash flows from finance leases	65	52
Financing cash flows from finance leases	44	47

The following table summarizes future lease payments by fiscal year:


	October 30, 2021			July 30, 2022
(Dollars in millions)	Operating Leases	Finance Leases	Total	Operating Leases	Finance Leases	Total
2021	$69	$50	$119
2022	289	193	482	$124	$94	$218
2023	278	176	454	251	218	469
2024	247	161	408	233	210	443
2025	234	155	389	227	205	432
After 2025	3,541	2,685	6,226
2026				223	205	428
After 2026				3,617	3,722	7,339
Total lease payments	$4,658	$3,420	$8,078	$4,675	$4,654	$9,329
Amount representing interest	(1,979)	(1,714)	(3,693)	(1,999)	(2,195)	(4,194)
Lease liabilities	$2,679	$1,706	$4,385	$2,676	$2,459	$5,135

Table of Contents

The following table summarizes weighted-average remaining lease term and discount rate:


	October 30, 2021	January 30, 2021	July 30, 2022	January 29, 2022
Weighted-average remaining term (years)
Operating leases	20	19	20	20
Finance leases	20	18	21	20
Weighted-average discount rate
Operating leases	6%	6%	6%	6%
Finance leases	7%	10%	6%	7%

Other lease information is as follows:


	Nine Months Ended		Six Months Ended
(Dollars in Millions)	October 30, 2021	October 31, 2020	July 30, 2022	July 31, 2021
Property and equipment acquired through:
Property and equipment acquired (disposed) through exchange of:
Finance lease liabilities	$755	$118	$730	$569
Operating lease liabilities	8	140	114	(29)

The following tables summarize our financing obligations and where they are presented in our Consolidated Financial Statements:


Consolidated Balance Sheets	Consolidated Balance Sheets			Consolidated Balance Sheets
(Dollars in millions)	Classification	October 30, 2021	January 30, 2021	Classification	July 30, 2022	January 29, 2022	July 31, 2021
Assets
Financing obligations	Property & equipment, net	$57	$65	Property and equipment, net	$52	$55	$60
Liabilities
Current	Current portion of finance leases & financing obligations	31	39	Current portion of finance leases and financing obligations	18	31	34
Noncurrent	Finance leases & financing obligations	452	461	Finance leases and financing obligations	449	445	449
Total financing obligations		$483	$500	Total financing obligations	$467	$476	$483


Consolidated Statement of Operations		Three Months Ended		Six Months Ended
(Dollars in Millions)	Classification	July 30, 2022	July 31, 2021	July 30, 2022	July 31, 2021
Amortization of financing obligation assets	Depreciation and amortization	2	3	4	5
Interest on financing obligations	Interest expense, net	15	10	27	19
Total financing obligations		$17	$13	$31	$24


Consolidated Statement of Cash Flows	Six Months Ended
(Dollars in Millions)	July 30, 2022	July 31, 2021
Cash paid for amounts included in the measurement of financing obligations
Operating cash flows from financing obligations	$26	$19
Financing cash flows from financing obligations	11	18
Proceeds from financing obligations	5	4

The following table summarizes future financing obligation payments by fiscal year:


	October 30, 2021	July 30, 2022
(Dollars in millions)	Financing Obligations	Financing Obligations
2021	$16
2022	73	$37
2023	71	78
2024	67	77
2025	58	75
After 2025	486
2026		74
After 2026		957
Total lease payments	$771	$1,298
Non-cash gain on future sale of property	207	167
Amount representing interest	(495)	(998)
Financing obligation liability	$483	$467

The following table summarizes the weighted-average remaining term and discount rate for financing obligations:


	October 30, 2021	January 30, 2021	July 30, 2022	January 29, 2022
Weighted-average remaining term (years)	10	8	14	10
Weighted-average discount rate	9%	7%	13%	9%

5. Stock-Based Awards

The following table summarizes our stock-based awards activity for the ~~nine~~six months ended ~~October~~July 30, ~~2021:~~2022:


	Stock Options		Nonvested Stock Awards		Performance Share Units		Stock Options		Nonvested Stock Awards		Performance Share Units
(Shares and Units in Thousands)	Shares	Weighted Average Exercise Price	Shares	Weighted Average Grant Date Fair Value	Units	Weighted Average Grant Date Fair Value	Shares	Weighted Average Exercise Price	Shares	Weighted Average Grant Date Fair Value	Units	Weighted Average Grant Date Fair Value
Balance - January 30, 2021	36	$52.15	3,451	$32.09	1,037	$49.95
Balance - January 29, 2022							12	$48.66	2,769	$36.17	856	$42.74
Granted	—		657	55.83	220	58.55	—		678	57.47	236	67.18
Exercised/vested	(23)	54.00	(1,126)	35.36	(211)	72.21	(12)	48.66	(987)	38.89	—
Forfeited/expired	(1)	51.27	(170)	33.47	(33)	30.42	—		(105)	43.99	(218)	36.89
Balance - October 30, 2021	12	$48.66	2,812	$36.25	1,013	$47.82
Balance - July 30, 2022							—	$—	2,355	$40.81	874	$50.79

In 2019, we issued 1,747,441 stock warrants. The total vested and unvested warrants as of ~~October~~July 30, ~~2021~~2022 were ~~698,977~~1,048,465 and ~~1,048,464~~698,976, respectively.

6. Contingencies

We are subject to certain legal proceedings and claims arising out of the conduct of our business. In the opinion of management, the outcome of these proceedings and litigation will not have a material adverse impact on our Consolidated Financial Statements.

7. Income Taxes

The ~~third quarter and year to date 2021 resulted in income tax expense driven by book income. The~~ effective income tax rate infor the ~~third~~second quarter of 2022 was 24.6% compared to 24.8% for the second quarter of 2021. Year to date, the rate is 22.8% for both the current and prior year periods. The year to date ~~2020 was driven by~~rates reflect the ~~net loss due to~~recognition of favorable tax items in the ~~temporary closure~~first quarter of ~~our stores~~both 2022 and ~~the benefit of the net loss carryback to years with a federal statutory tax rate of~~ 35%.2021.

8. Net Income ~~(Loss)~~ Per Share

Basic ~~Net~~net income ~~(loss)~~ per share is ~~Net~~net income ~~(loss)~~ divided by the average number of common shares outstanding during the period. Diluted ~~Net~~net income ~~(loss)~~ per share includes incremental shares assumed for share-based awards and stock warrants. Potentially dilutive shares include stock options, unvested restricted stock units and awards, and warrants

Table of Contents

outstanding during the period, using the treasury stock method. Potentially dilutive shares are excluded from the computations of diluted earnings per share (“EPS”) if their effect would be anti-dilutive.

The information required to compute basic and diluted ~~Net~~net income ~~(loss)~~ per share is as follows:


	Three Months Ended		Nine Months Ended		Three Months Ended		Six Months Ended
(Dollar and Shares in Millions, Except per Share Data)	October 30, 2021	October 31, 2020	October 30, 2021	October 31, 2020	July 30, 2022	July 31, 2021	July 30, 2022	July 31, 2021
Numerator—Net income (loss)	$243	$(12)	$639	$(506)
Numerator—Net income					$143	$382	$157	$396
Denominator—Weighted-average shares:
Basic	145	154	151	154	127	152	127	153
Dilutive impact	2	—	2	—	1	2	2	2
Diluted	147	154	153	154	128	154	129	155
Net income (loss) per share:
Net income per share:
Basic	$1.67	$(0.08)	$4.24	$(3.28)	$1.13	$2.51	$1.24	$2.58
Diluted	$1.65	$(0.08)	$4.19	$(3.28)	$1.11	$2.48	$1.22	$2.55

The following potential shares of common stock were excluded from the diluted ~~Net~~net income ~~(loss)~~ per share calculation because their effect would have been anti-dilutive:

Three Months Ended
Nine Months Ended

October 30, 2021
October 31, 2020
October 30, 2021
October 31, 2020
Anti-dilutive shares
3
6
3
6


	Three Months Ended		Six Months Ended
(Shares in Millions)	July 30, 2022	July 31, 2021	July 30, 2022	July 31, 2021
Anti-dilutive shares	3	3	3	3

9. Subsequent Events

On August 9, 2022, the Board of Directors of the Company declared a quarterly cash dividend of $0.50 per share. The dividend will be paid on September 21, 2022 to all shareholders of record at the close of business on September 7, 2022.

On August 18, 2022, the Company entered into an accelerated share repurchase agreement ("ASR"), pursuant to its previously announced share repurchase program, with Goldman Sachs & Co. LLC to repurchase approximately $500 million of the Company’s common stock. On August 22, 2022, the Company received an initial delivery of approximately 11.8 million shares of common stock, representing approximately 80% of the total shares that are expected to be repurchased under the ASR. Final settlement of the transactions under the ASR is expected to occur in November 2022.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

For purposes of the following discussion, unless noted, all references to "the quarter” and “the ~~third~~second quarter” are for the three fiscal months (13 weeks) ended ~~October~~July 30, ~~2021, October~~2022 or July 31, ~~2020, or November 2, 2019.~~ 2021. References to ~~“year~~"year to ~~date”~~date" and "first half" are for the ~~nine~~six fiscal months ~~(39~~(26 weeks) ended ~~October~~July 30, ~~2021~~2022 or ~~October~~July 31, ~~2020.~~2021. References to ~~“the~~"the first ~~quarter”~~quarter" are for the three fiscal months (13 weeks) ended April 30, 2022 or May 1, ~~2021 or May 2, 2020. References to “the second quarter” are for the three fiscal months (13 weeks) ended July 31, 2021 or August 1, 2020.~~2021.

This Form 10-Q contains “forward-looking statements” made within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as "believes," "anticipates," "plans," "may," "intends," "will," "should," "expects," and similar expressions are intended to identify forward-looking statements. Forward-looking statements include the information under ~~“2021~~“2022 Outlook,” as well as statements about our future sales or financial performance and our plans, performance, and other objectives, expectations, or intentions, such as statements regarding our liquidity, debt service requirements, planned capital expenditures, future store initiatives, and adequacy of capital resources and reserves. Forward-looking statements are based on management’s then-current views and assumptions and, as a result, are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected. Any such forward-looking statements are qualified by the important risk factors, described in Part I Item 1A of our ~~2020~~2021 Form 10-K and in Part II Item 1A of our Form 10-Q for the quarter ended April 30, 2022, or disclosed from time to time in our filings with the SEC, that could cause actual results to differ materially from those predicted by the forward-looking statements. Forward-looking statements relate to the date initially made and we undertake no obligation to update them.

Kohl's is a leading omnichannel retailer operating ~~1,162~~1,166 stores and a website (www.Kohls.com) as of ~~October~~July 30, ~~2021.~~2022. Our Kohl's stores and website sell moderately-priced private and national brand apparel, footwear, accessories, beauty, and home products. Our Kohl's stores generally carry a consistent merchandise assortment with some differences attributable to local ~~preferences.~~preferences, store size, and presence of Sephora shop-in-shops. Our website includes merchandise which is available in our stores, as well as merchandise that is available only online.

~~As discussed in our 2020 Form 10-K, the COVID-19 pandemic has had significant adverse effects on our business. We are closely monitoring the effects~~ of the ongoing COVID-19 pandemic and its continued impact on our business. We cannot estimate with certainty the length or severity of this pandemic, or the extent to which the disruption may materially impact our Consolidated Financial Statements.During the first nine months of 2021, we saw momentum in our business which allowed us to resume our capital allocation strategy including reinstating dividends, resuming our share repurchase program, and employing liability management strategies.

~~Due to the significant impact of COVID-19 on 2020 operating results, we are providing the below comparisons to the third quarter of 2019 to provide additional context.~~

~~In 2020, the Company announced a new strategic framework with a~~The Company’s vision is to be “the most trusted retailer of choice for the active and casual ~~lifestyle.” This~~lifestyle” and its strategy is ~~designed to create~~focused on delivering long-term shareholder ~~value and has four key~~value. Key strategic focus ~~areas:~~areas for the Company include: driving top line growth, ~~expanding~~delivering a 7% to 8% operating margin, maintaining disciplined capital management, and sustaining an agile, accountable, and inclusive culture.

A weakening macro environment, high inflation, and dampened consumer spending are having broad implications across much of retail, especially in discretionary categories like apparel. Our ~~financial outlook for the balance of the~~updated full year ~~continues to incorporate ongoing uncertainty related to COVID-19, as well as industry-wide supply chain challenges~~guidance contemplates lower sales and ~~headwinds related to higher digital penetration~~margin pressure from a more difficult economic backdrop and ~~wages.~~a more competitive landscape.

Net sales ~~increased 15.5% for~~decreased 8.5% in the ~~third~~second quarter of ~~2021~~2022 and ~~33.9% for~~7.0% year to date ~~2021.~~2022.

Net sales includes revenue from the sale of merchandise, net of expected returns, and shipping revenue.

Comparable sales is a measure that highlights the performance of our stores and digital channel by measuring the change in sales for a period over the comparable, prior-year period of equivalent length. Comparable sales includes all store and digital sales, except sales from stores open less than 12 months, stores that have been closed, and stores where square footage has changed by more than 10%. We measure the change in digital sales by including all sales initiated online or through mobile applications, including omnichannel transactions which are fulfilled through our stores.

We measure digital penetration as digital sales over net sales. These amounts do not take into consideration fulfillment node, digital returns processed in stores, and coupon behaviors.

Comparable sales and digital penetration measures vary across the retail industry. As a result, our comparable sales calculation and digital penetration are non-GAAP measures that may not be consistent with the ~~similarly titled~~similarly-titled measures reported by other companies.

Other revenue ~~increased $34 million~~was flat for the ~~third~~second quarter of ~~2021~~2022 and ~~$21~~increased $19 million year to ~~date.~~date 2022. The ~~increases were~~increase year to date was driven by ~~increases in~~higher credit revenue due to ~~lower write-off activity partially offset by lower accounts receivable balances associated~~higher late fees.

On March 14, 2022, we amended and restated our private label credit card program agreement with ~~decreased sales~~Capital One through March 31, 2030. The agreement will operate in ~~2020 and higher payment rates in 2021.~~substantially the same manner as it currently operates.

Cost of merchandise sold includes the total cost of products sold, including product development costs, net of vendor payments other than reimbursement of specific, incremental, and identifiable costs; inventory shrink; markdowns; freight expenses associated with moving merchandise from our vendors to our distribution centers; shipping expenses for digital sales; terms cash discount; and depreciation of product development facilities and equipment. Our cost of merchandise sold may not be comparable with that of other retailers because we include distribution center and buying costs in selling, general, and administrative expenses while other retailers may include these expenses in cost of merchandise sold.

~~For~~Gross margin is calculated as net sales less cost of merchandise sold. In the ~~third~~second quarter of ~~2021,~~2022, gross margin was ~~39.9%~~39.6% of net sales, ~~increasing 408~~decreasing 290 basis points. ~~YTD 2021~~Year to date 2022 gross margin was ~~40.6%~~39.0% of net sales, ~~increasing 1,005~~decreasing 189 basis points.

~~Gross~~ The decrease in gross margin ~~benefited from strong inventory management~~for the second quarter was primarily driven by elevated freight costs, product cost inflation, and further scaling our pricing and promotion optimization strategies, partially offset by incremental transportation costs related to the constrained global supply chain. In executing against our strategy, we have structurally improved our margin efficiency and are confident in our ability to sustain the recent improvement, while we are also monitoring industry-wide supply chain uncertainties and cost inflation. We have navigated the challengesincreased promotional activity. Year to date, ~~but acknowledge there still remains a lot of uncertainty as we look to~~ the ~~balance of the year.~~decrease was driven by increased freight costs.

SG&A includes compensation and benefit costs (including stores, corporate, buying, and distribution centers); occupancy and operating costs of our retail, distribution, and corporate facilities; freight expenses associated with moving merchandise from our distribution centers to our retail stores and among distribution and retail facilities other than expenses to fulfill digital sales; marketing expenses, offset by vendor payments for reimbursement of specific, incremental, and identifiable costs; expenses related to our credit card operations; and other administrative revenues and expenses. We do not include depreciation and amortization in SG&A. The classification of these expenses varies across the retail industry.

Many of our expenses, including store payroll and distribution costs, are variable in nature. These costs generally increase as sales increase and decrease as sales decrease. We measure both the change in these variable expenses and the expense as a percent of revenue. If the expense as a percent of revenue decreased from the prior year, the expense "leveraged". If the expense as a percent of revenue increased over the prior year, the expense "deleveraged".

The following table summarizes the ~~increases (decreases)~~changes in SG&A by expense type:

SG&A expenses increased ~~$78~~$42 million, or ~~6.0%~~3.4%, to ~~$1.4~~$1.3 billion in the ~~third~~second quarter of ~~2021, and $373 million, or 10.9%, to $3.8 billion year to date.~~ 2022.As a percentage of revenue, SG&A ~~leveraged~~deleveraged by ~~273~~351 basis ~~points for the quarter and 552 basis points year~~points. Year to date ~~as we continue~~2022, SG&A expenses increased $165 million, or 6.8%, to ~~deliver against our efforts to drive marketing and technology efficiency and improve store productivity, which more than offset increased wage pressure across our stores and distribution centers.~~

$2.6 billion. As a percentage of revenue, SG&A deleveraged by 409 basis points. The increase in SG&A during the ~~third~~second quarter and year to date ~~2021~~2022 was primarily driven by strategic investments made in our stores to support the Sephora shop-in-shops openings, store refreshes, and reflows. Additionally, we experienced increases in ~~store, distribution,~~wages and ~~marketing expenses as sales recovered~~heightened transportation costs both in the second quarter and ~~expenses normalized after our store closures last~~ year ~~due~~ to ~~COVID-19.~~date 2022. Last, Corporate ~~expenses also~~and other costs decreased in the second quarter of 2022 and increased year to date 2022. The decrease in the second quarter of 2022 was due to lower general corporate costs partially offset by $9 million of expense related to the ~~retention credit benefit we were eligible for under~~strategic review process. The ~~Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) in 2020. Partially offsetting the~~year to date 2022 increase ~~in SG&A expense~~ was ~~a decrease in technology expense~~primarily driven by ~~a more balanced staffing model.~~

~~Wage inflation is expected~~expenses related to ~~remain a headwind as~~ the ~~employment market remains very tight. To strengthen our position for~~proxy contest and the upcoming holiday season, we employed a retention incentive for associates in our stores and distribution centers. We will continue to monitor our positioning in the market to ensure that we remain competitive. We will look to mitigate the higher costs through increased store productivity and efficiency across other areas of the business.strategic review process.

The decrease in depreciation and amortization ~~decrease for year to date 2021~~in the first half of 2022 was primarily driven by reduced capital spending in ~~2020 due to COVID-19.~~

In the third quarter of 2020, we recognized a corporate restructuring charge of $21 million in Impairments, store closing, and other costs. In the second quarter of 2020, we recognized a gain of $2 million related to a lease amendment which was partially offset by an asset impairment on assets held for sale. In the first quarter of 2020, we incurred $51 million in asset write-offs, $2 million related to capital reductions and strategy changes due to COVID-19, and $13 million in brand exit costs.

~~In the second quarter of 2020, we recognized a gain of $127 million from the sale leaseback of our San Bernardino E-commerce fulfillment and distribution centers.~~technology.

Net interest expense ~~decreased~~increased in the ~~third~~first half of 2022 due to more financing leases, partially offset by a decrease in interest expense in the first quarter ~~and year~~of 2022 due to ~~date 2021~~the benefit of debt reductions as a result of ~~higher interest expense in 2020 due to the outstanding balance on the revolving credit facility which was fully paid in October 2020 and the $600 million notes issued in April 2020 partially offset by~~our liability management strategies employed induring 2021.

In the first quarter of 2021, we completed a cash tender offer and recognized a loss of $201 million from the extinguishment of debt.

The third quarter and year to date 2021 resulted in income tax expense driven by book income. The effective income tax rate in the third quarter and year to date 2020 was driven by the net loss due to the temporary closure of our stores and the benefit of the net loss carryback to years with a federal statutory tax rate of 35%.

The decrease in provision for income taxes was driven by lower taxable income in the second quarter and year to date 2022. The year to date rates reflect the recognition of favorable tax items in the first quarter of both 2022 and 2021.


(Dollars in Millions, Except per Share Data)	Operating Income (Loss)	Income (Loss) before Income Taxes	Net Income (Loss)	Earnings (Loss) Per Diluted Share	Operating Income	Income before Income Taxes	Net Income	Earnings Per Diluted Share
Three Months Ended October 30, 2021
Three Months Ended July 30, 2022
GAAP	$387	$321	$243	$1.65	$266	$189	$143	$1.11
Loss on extinguishment of debt	—				—
Impairments, store closing, and other costs	—			—
(Gain) on sale of real estate	—
Income tax impact of items noted above	—				—
Adjusted (non-GAAP) (1)	$387	$321	$243	$1.65	$266	$189	$143	$1.11
Three Months Ended October 31, 2020
GAAP (2)	$22	$(56)	$(12)	$(0.08)
Loss on extinguishment of debt	—
Impairments, store closing, and other costs	21			0.14
(Gain) on sale of real estate	—
Income tax impact of items noted above	—		(7)	(0.05)
Adjusted (non-GAAP) (3)	$43	$(35)	$2	$0.01
Nine Months Ended October 30, 2021
Three Months Ended July 31, 2021
GAAP	$1,230	$834	$639	$4.19	$570	$508	$382	$2.48
Loss on extinguishment of debt	—	201		1.32	—	—
Impairments, store closing, and other costs	—			—
(Gain) on sale of real estate	—			—
Income tax impact of items noted above					—
Adjusted (non-GAAP) (1)					$570	$508	$382	$2.48
Six Months Ended July 30, 2022
GAAP					$348	$203	$157	$1.22
Loss on extinguishment of debt					—
Income tax impact of items noted above					—
Adjusted (non-GAAP) (1)					$348	$203	$157	$1.22
Six Months Ended July 31, 2021
GAAP					$843	$513	$396	$2.55
Loss on extinguishment of debt					—	201		1.29
Income tax impact of items noted above	—		(50)	(0.33)	—		(50)	(0.32)
Adjusted (non-GAAP)	$1,230	$1,035	$790	$5.18	$843	$714	$547	$3.52
Nine Months Ended October 31, 2020
GAAP	$(578)	$(792)	$(506)	$(3.28)
Loss on extinguishment of debt	—			—
Impairments, store closing, and other costs	85			0.55
(Gain) on sale of real estate	(127)			(0.82)
Income tax impact of items noted above	—		16	0.10
Adjusted (non-GAAP)	$(620)	$(834)	$(532)	$(3.45)

We believe the adjusted results in the table above are useful because they provide enhanced visibility into our results for the periods excluding the impact of certain items such as those included in the table above. However, these non-GAAP financial measures are not intended to replace the comparable GAAP measures.

Our business, like that of other retailers, is subject to seasonal influences. Sales and income are typically higher during the back-to-school and holiday seasons. Because of the seasonality of our business, results for any quarter are not necessarily indicative of the results that may be achieved for a full fiscal year.~~Due to the impact of COVID-19, typical sales patterns may not occur this year.~~

In addition to COVID-19, we expect that our operations will continue to be influenced by general economic conditions, including food, fuel, and energy prices, higher unemployment, wage and transportation inflation, product cost inflation, and costs to source our merchandise, including tariffs. There can be no assurances that such factors will not continue to impact our business in the future.

Our capital allocation strategy is to invest to maximize our overall long-term return, maintain a strong balance sheet, and maintain our investment grade rating. We follow a disciplined approach to capital allocation based on the following priorities: first we invest in our business to drive long-term profitable growth; second we pay a quarterly dividend; and

third we return excess cash to shareholders through our share repurchase program. In addition, when appropriate, we will complete liability management transactions.

~~Liquidity~~Our period-end cash and ~~Capital Resources~~cash equivalents balance decreased to $222 million from $2.6 billion in the second quarter of 2021.Our cash and cash equivalents balance includes short-term investments of $11 million and $2.3 billion as of July 30, 2022, and July 31, 2021, respectively. Our investment policy is designed to preserve principal and liquidity of our short-term investments. This policy allows investments in large money market funds or in highly rated direct short-term instruments. We also place dollar limits on our investments in individual funds or instruments.

We expect our balance sheet and cash flow metrics to be more challenging in 2022 and most notably at the end of the third quarter of fiscal 2022 as we build inventory in advance of the holiday season.

~~Our working capital and inventory levels typically build throughout the fall, peaking during the November and December holiday selling season.~~

Our operating cash outflows generally consist of payments to our employees for wages, salaries and employee benefits, payments to our merchandise vendors for inventory (net of vendor allowances), payments to our shipping carriers, and payments to our landlords for rent. Operating cash outflows also include payments for income taxes and interest on our debt borrowings.

Operating activities ~~generated $1.8 billion year to date 2021~~used $546 million of cash in the first half of 2022 compared to ~~$910 million year to date 2020.~~$1.7 billion of cash generated in the first half of 2021. The ~~increase~~decrease in operating cash flow was primarily ~~due to~~driven by an increase in ~~net income resulting from increased sales~~inventory. The inventory increase was due to increased beauty inventory to support the ~~impact of COVID-19 last year~~Sephora shop-in-shop rollouts, elevated in-transit levels due to continued supply chain challenges, and a ~~tax refund received~~rebuild of inventory in ~~2021 related to the net loss we incurred in 2020~~key areas such as active and ~~the carryback provision under the CARES Act. Partially offsetting this was increased inventory purchases in 2021 due to reduced inventory receipts in 2020 in response to COVID-19.~~women's.

Our investing cash outflows include payments for capital expenditures, including investments in new and existing stores, improvements to supply chain, and technology costs. Our investing cash inflows are generally from proceeds from sales of property and equipment.

Investing activities used ~~$391~~$544 million ~~year to date 2021~~in the first half of 2022 and ~~$70~~$187 million ~~year to date 2020.~~in the first half of 2021. The increase was primarily driven by in-store investments related to Sephora ~~buildouts,~~shop-in-shop build-outs, store refreshes, and other customer experience and sales driving ~~enhancements; our new e-commerce fulfillment center~~enhancements.

During the first half of 2022, we opened ~~earlier this year as well as proceeds from~~340 Sephora-branded retail shop-in-shops and now have a total of 540 Sephora shop-in-shops open. We are planning on opening another 60 shop-in-shops in 2022 and at least 250 shop-in-shops in 2023. We are also working with Sephora to have a Sephora presence in the ~~sale of real estate in 2020.~~remaining 300 stores.

Our financing strategy is to ensure liquidity and access to capital markets. We also strive to maintain a balanced portfolio of debt maturities, while minimizing our borrowing costs. Our ability to access the public debt market has provided us with adequate sources of liquidity. Our continued access to these markets depends on multiple factors, including the condition of debt capital markets, our operating performance, and maintaining strong credit ratings.

If our credit ratings were lowered, our ability to access the public debt markets, our cost of funds, and other terms for new debt issuances could be adversely impacted. Each of the credit rating agencies reviews its rating periodically and there is no guarantee our current credit ratings will remain the same.

The majority of our financing activities include repurchases of common stock, proceeds from and/or repayments of long-term debt, and dividend payments.

Financing activities used ~~$1.8~~$275 million in the first half of 2022 and $1.2 billion ~~year to date 2021 and generated $376~~in the first half of 2021.

In the second quarter of 2022 we drew on our credit facility. As of July 30, 2022, $79 million ~~year to date 2020.~~was outstanding.

In March 2021, we issued $500 million in aggregate principal amount of 3.375% notes with semi-annual interest payments beginning in November 2021. The notes include coupon rate step ups if our long-term debt is downgraded to below a BBB- credit rating by S&P Global Ratings or Baa3 by Moody’s Investors Service, Inc. The notes mature in May 2031.

In April 2021, we completed a cash tender offer for $1.0 billion of senior unsecured debt. We recognized a $201 million loss on extinguishment of debt in the first quarter of 2021, which includes the $192 million tender premium paid to tendering note holders in accordance with the terms of the tender offer, a $6 million non-cash write-off of

deferred financing costs and original issue discounts associated with the extinguished debt, and $3 million in other fees.

In October 2021, we entered into a Credit Agreement with various lenders which provides for a $1.0 billion senior unsecured five-year revolving credit facility that will mature in October 2026 and replaces our existing senior secured revolving credit facility. Among other things, the agreement includes a maximum leverage ratio financial covenant and restrictions on liens and subsidiary indebtedness, all of which are generally consistent with the prior 2019 senior unsecured five-year revolving credit facility. We may request an increase in revolving credit commitments under the facility of up to $500 million in certain circumstances. Events of default under the Credit Agreement include, among other things, a change of control of the Company and the Company’s default on other debt exceeding $75 million. No borrowings were outstanding on the credit facility in place as of October 30, 2021, January 30, 2021, or October 31, 2020.

In March 2020, we fully drew down our $1.0 billion senior unsecured revolver. In April 2020, we replaced and upsized the unsecured credit facility with a $1.5 billion senior secured, asset based revolving credit facility maturing in July 2024.

In April 2020, we issued $600 million in aggregate principal amount of 9.50% notes with semi-annual interest payments beginning in November 2020. The notes mature in May 2025. We used part of the net proceeds from this offering to repay $500 million of the borrowings under our senior secured, asset based revolving credit facility with the remainder for general corporate purposes.

~~In October 2020, we fully repaid $1.0 billion outstanding on the revolver and had $1.5 billion available for utilization.~~

We paid cash for treasury stock purchases of ~~$807~~$158 million ~~year to date 2021 and $8 million year to date 2020.During the first quarter of 2021, we reinstated our share repurchase program which had been suspended~~ in the first ~~quarter~~half of ~~2020~~2022 and $301 million in ~~response~~the first half of 2021. The 2022 purchases were made pursuant to ~~COVID-19.~~a Rule 10b5-1 plan adopted in November 2021. Share repurchases are discretionary in nature. The timing and amount of repurchases are based upon available cash balances, our stock price, and other factors.

Cash dividend payments were ~~$114~~$127 million ($~~0.75~~1.00 per share) ~~year to date 2021~~in the first half of 2022 and ~~$108~~$77 million ($~~0.704~~0.50 per share) ~~year to date 2020. During~~in the first ~~quarter~~half of 2021, we reinstated our dividend program which had been suspended beginning in the second quarter of 2020 in response to COVID-19. On November 10, 2021, our Board of Directors declared a quarterly cash dividend on our common stock of $0.25 per share. The dividend is payable December 22, 2021 to shareholders of record at the close of business on December 8, 2021.

As of ~~October~~July 30, ~~2021,~~2022, our credit ratings and outlook were as follows:

Key financial ratios that provide certain measures of our liquidity are as follows:

Our working capital and inventory levels typically build throughout the fall, peaking during the November and December holiday selling season.

The decrease in our working capital and current ratio is primarily due to lower cash balances as a result of higher capital expenditures and an increase in ~~accrued liabilities.~~

Our senior unsecured five-year revolving credit facility includes terms and covenants generally consistent with our prior 2019 senior unsecured five-year revolving credit facility. These covenants vary from the calculation disclosed in our Annual Report on Form 10-K, which related to our prior credit agreement. As of ~~October~~July 30, ~~2021,~~2022, we were in compliance with all covenants in our debt instruments and expect to remain in compliance during the remainder of fiscal ~~2021.~~2022.

~~During the first nine months of 2021, we issued $500 million in aggregate principal amount of 3.375% notes due in 2031 and completed a cash tender offer for $1.0 billion of our senior unsecured debt.~~We also replaced our senior secured, asset based revolving credit facility, under which no borrowings were outstanding at the end of the quarter. See "Liquidity and Capital Resources" for additional details about these financing activities. See Note 3 of the Consolidated Financial Statements for additional details about outstanding debt. There have been no ~~other~~ significant changes in the contractual obligations disclosed in our ~~2020~~2021 Form ~~10-K.~~10-K other than leases, which have been disclosed in Note 4 of the Consolidated Financial Statements, and borrowings in our revolving credit facility, which have been disclosed in Note 3 of the Consolidated Financial Statements and under "Liquidity and Capital Resources - Financing Activities".

We have not provided any financial guarantees arising from arrangements with unconsolidated entities or persons as of ~~October~~July 30, ~~2021.~~2022.

We have not created, and are not a party to, any special-purpose or off-balance sheet entities for the purpose of raising capital, incurring debt, or operating our business. We do not have any arrangements or relationships with entities that are not consolidated into our financial statements that are reasonably likely to materially affect our financial condition, liquidity, results of operations, or capital resources.

The preparation of financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect reported amounts. Management has discussed the development, selection, and disclosure of its estimates and assumptions with the Audit Committee of our Board of Directors. There have been no significant changes in the critical accounting policies and estimates discussed in our ~~2020~~2021 Form 10-K.

Our operating results are subject to interest rate risk as the $500 million of notes issued in March 2021 include coupon rate step ups if our long-term debt is downgraded to below a BBB- credit rating by S&P Global Ratings or Baa3 by Moody’s Investors Service, Inc. There have been no ~~other~~ significant changes in the ~~Quantitative and Qualitative Disclosures About Market Risk~~market risks described in our ~~2020~~2021 Form 10-K.

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we carried out an evaluation of the effectiveness of the design and operation of our disclosure

controls and procedures (the “Evaluation”) at a reasonable assurance level as of the last day of the period covered by this report.

Based upon the Evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures are effective at the reasonable assurance level. Disclosure controls and procedures are

defined by Rule 13a-15(e) of the Securities Exchange Act of 1934 (the "Exchange Act") as controls and other procedures that are designed to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified by the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosures.

It should be noted that the design of any system of controls is based in part upon certain assumptions about the likelihood of future events and there can be no assurance that any design will succeed in achieving our stated goals under all potential future conditions, regardless of how remote.

There were no changes in our internal control over financial reporting during the quarter ended ~~October~~July 30, ~~2021~~2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

There have been no significant changes in the Risk Factors described in our ~~2020~~2021 Form ~~10-K.~~10-K, other than as set out in our Quarterly Report on Form 10-Q for the quarter ended April 30, 2022, in Item 1A of Part II.

In ~~April 2021,~~February 2022, our Board of Directors increased the remaining share repurchase authorization under our existing share repurchase program to ~~$2.0~~$3.0 billion. Purchases under the repurchase program may be made in the open market, through block trades, and other negotiated transactions. We expect to execute the share repurchase program primarily in open market transactions, subject to market conditions. There is no fixed termination date for the repurchase program, and the program may be suspended, discontinued, or accelerated at any time.

The following table contains information for shares of common stock repurchased and shares acquired from employees in lieu of amounts required to satisfy minimum tax withholding requirements upon the vesting of the employees’ stock-based compensation during the three fiscal months ended ~~October~~July 30, ~~2021:~~2022:

On August 9, 2022, the Board of Directors (the “Board”) of the Company approved and adopted the Amended and Restated Bylaws (the “Bylaws”), which became effective the same day, in order to, among other things, (i) address recently adopted amendments to Rule 14a-19 under the Securities Exchange Act of 1934, as amended, by clarifying that no person may solicit proxies in support of a director nominee other than the Board’s nominees unless such person has complied with Rule 14a-19, and that any person soliciting proxies in support of a director nominee other than the Board’s nominees must comply with the requirements to provide notices required under Rule 14a-19 in a timely manner and deliver reasonable evidence that the Rule 14a-19 requirements have been met; (ii) require any notice of director nomination to be accompanied by a completed written questionnaire required of the Company’s directors and officers, and that the questionnaire and written representation and agreement of a nominee be in the form provided by the Company; and (iii) require that a shareholder directly or indirectly soliciting proxies from other shareholders use a proxy card color other than white.

The preceding summary of the amendments to the Bylaws is qualified in its entirety by reference to, and should be read in connection with, the complete copy of the Amended and Restated Bylaws filed herewith as Exhibits 3.1 (clean) and 3.2 (marked).

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


Wisconsin		39-1630919
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

N56 W17000 Ridgewood Drive, Menomonee Falls, Wisconsin		53051
(Address of principal executive offices)		(Zip Code)


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $.01 par value	KSS	New York Stock Exchange
Preferred Stock Purchase Rights	—	New York Stock Exchange


PART I	FINANCIAL INFORMATION	3
Item 1.	Financial Statements:	3
	Consolidated Balance Sheets	3
	Consolidated Statements of Operations	4
	Consolidated Statements of Changes in Shareholders' Equity	5
	Consolidated Statements of Cash Flows	6
	Notes to Consolidated Financial Statements	7
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	13
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	2120
Item 4.	Controls and Procedures	2120

PART II	OTHER INFORMATION	2322
Item 1A.	Risk Factors	2322
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	2322
Item 5.	Other Information	22
Item 6.	Exhibits	2423
	Signatures	2524


Net sales	~~Increase mid-twenties %~~(5%) to (6%) vs ~~2020~~2021
Operating margin	~~8.4%~~4.2% - ~~8.5%~~4.5%
~~Adjusted diluted~~Diluted earnings per share ~~(a)~~	~~$7.10~~$2.80 - ~~$7.30~~$3.20
Capital expenditures	~~$600 - $650~~$825 million
~~Share repurchases~~	~~$1.3 billion~~


	Moody’s	Standard & Poor’s	Fitch
Long-term debt	Baa2	BBB-	BBB-
Outlook	~~Negative~~Stable	~~Stable~~Negative	Stable


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


Large Accelerated Filer	☒	Accelerated Filer	☐
Non-Accelerated Filer	☐	Smaller Reporting Company	☐
		Emerging Growth Company	☐


(Dollars in Millions, Except per Share Data)	Total Number of Shares Purchased	Average Price Paid Per Share	Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs
May 1 - May 28, 2022	15,312	$48.44	—	$2,976
May 29 - July 2, 2022	27,856	40.48	—	$2,976
July 3 - July 30, 2022	6,219	26.98	—	$2,976
Total	49,387	$41.25	—


Exhibit		Description
3.1		Amended and Restated Bylaws (clean version), incorporated by reference to Exhibit 3.1 of the Company's Current Report on Form 8-K dated August 10, 2022.
3.2		Amended and Restated Bylaws (marked version), incorporated by reference to Exhibit 3.2 of the Company's Current Report on Form 8-K dated August 10, 2022.
10.1		~~Credit~~Amended and Restated Executive Compensation Agreement between Kohl’s, Inc. and Siobhán McFeeney dated as of ~~October 22, 2021 by~~July 16, 2022.*
10.2		Amended and ~~among the Company, the various lenders party thereto, Wells Fargo Bank, National Association,~~Restated Raymond Executive Compensation Agreement between Kohl’s, Inc. and Christie Raymond dated as ~~Administrative Agent, a Swing Line Lender and an Issuing Bank, Bank~~ of America, N.A., JPMorgan Chase Bank, N.A., MUFG Bank, Ltd. and U.S. Bank National Association, as Syndication Agents, Swing Line Lenders, and Issuing Banks, and BMO Harris Bank, N.A., Capital One, N.A., Goldman Sachs Bank USA, Morgan Stanley Senior Funding, Inc., and TD Bank, N.A., as Documentation Agents, and Wells Fargo Securities, LLC, BofA Securities, Inc., JP Morgan Chase Bank, N.A., MUFG Bank, Ltd., and U.S. Bank National Association, as Joint Lead Arrangers and Bookrunners.August 16, 2022.*
31.1		Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2		Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1		Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2		Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS		Inline XBRL Instance Document
101.SCH		Inline XBRL Taxonomy Extension Schema
101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase
101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase
101.LAB		Inline XBRL Taxonomy Extension Label Linkbase
101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase
104		Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibits 101)

		*A management contract or compensatory plan or arrangement.


	Kohl’s Corporation (Registrant)

Date: ~~December 2, 2021~~September 1, 2022	/s/ Jill Timm
	Jill Timm On behalf of the Registrant and as Chief Financial Officer (Principal Financial Officer)