Document and Entity Information
Document and Entity Information - USD ($) $ in Billions | 12 Months Ended | ||
Feb. 01, 2020 | Mar. 11, 2020 | Aug. 02, 2019 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Period End Date | Feb. 1, 2020 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Entity Registrant Name | KOHL’S CORP | ||
Entity Central Index Key | 0000885639 | ||
Current Fiscal Year End Date | --02-01 | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Common Stock, Shares Outstanding | 155,246,500 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Interactive Data Current | Yes | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 8 | ||
Entity Shell Company | false | ||
Entity Emerging Growth Company | false | ||
Entity File Number | 1-11084 | ||
Entity Incorporation, State or Country Code | WI | ||
Entity Tax Identification Number | 39-1630919 | ||
Entity Address, Address Line One | N56 W17000 Ridgewood Drive | ||
Entity Address, City or Town | Menomonee Falls | ||
Entity Address, State or Province | WI | ||
Entity Address, Postal Zip Code | 53051 | ||
City Area Code | 262 | ||
Local Phone Number | 703-7000 | ||
Entity Small Business | false | ||
Title of each class | Common Stock, $.01 par value | ||
Trading Symbol(s) | KSS | ||
Name of each exchange on which registered | NYSE | ||
Documents Incorporated by Reference | Portions of the Proxy Statement for the Registrant’s Annual Meeting of Shareholders to be held on May 13, 2020 are incorporated into Part III. |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Feb. 01, 2020 | Feb. 02, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 723 | $ 934 |
Merchandise inventories | 3,537 | 3,475 |
Other | 389 | 426 |
Total current assets | 4,649 | 4,835 |
Property and equipment, net | 7,352 | 7,428 |
Operating leases | 2,391 | |
Other assets | 163 | 206 |
Total assets | 14,555 | 12,469 |
Current liabilities: | ||
Accounts payable | 1,206 | 1,187 |
Accrued liabilities | 1,233 | 1,364 |
Income taxes payable | 48 | 64 |
Current portion of: | ||
Finance lease and financing obligations | 124 | 115 |
Operating leases | 158 | |
Total current liabilities | 2,769 | 2,730 |
Long-term debt | 1,856 | 1,861 |
Finance lease and financing obligations | 1,367 | 1,523 |
Operating leases | 2,619 | |
Deferred income taxes | 260 | 184 |
Other long-term liabilities | 234 | 644 |
Shareholders’ equity: | ||
Common stock - 375 and 374 million shares issued | 4 | 4 |
Paid-in capital | 3,272 | 3,204 |
Treasury stock, at cost, 219 and 211 million shares | (11,571) | (11,076) |
Retained earnings | 13,745 | 13,395 |
Total shareholders’ equity | 5,450 | 5,527 |
Total liabilities and shareholders’ equity | $ 14,555 | $ 12,469 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - shares shares in Millions | Feb. 01, 2020 | Feb. 02, 2019 |
Statement Of Financial Position [Abstract] | ||
Common stock, shares issued | 375 | 374 |
Treasury stock, shares | 219 | 211 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Millions | 12 Months Ended | ||||
Feb. 01, 2020 | Feb. 02, 2019 | Feb. 03, 2018 | |||
Total revenue | $ 19,974 | $ 20,229 | $ 20,084 | ||
Cost of merchandise sold | $ 12,140 | $ 12,199 | $ 12,176 | ||
Type of Cost, Good or Service [Extensible List] | kss:MerchandiseMember | kss:MerchandiseMember | kss:MerchandiseMember | ||
Operating expenses: | |||||
Selling, general and administrative | $ 5,705 | $ 5,601 | $ 5,501 | ||
Depreciation and amortization | 917 | 964 | 991 | ||
Impairments, store closing and other costs | 113 | 104 | |||
Operating income | 1,099 | 1,361 | 1,416 | ||
Interest expense, net | 207 | 256 | 299 | ||
(Gain) loss on extinguishment of debt | (9) | 63 | |||
Income before income taxes | 901 | 1,042 | 1,117 | ||
Provision for income taxes | 210 | 241 | 258 | ||
Net income | $ 691 | $ 801 | $ 859 | ||
Net income per share: | |||||
Basic | $ 4.39 | $ 4.88 | $ 5.14 | ||
Diluted | $ 4.37 | $ 4.84 | $ 5.12 | ||
Net Sales [Member] | |||||
Total revenue | $ 18,885 | $ 19,167 | [1] | $ 19,036 | [1] |
Other Revenue [Member] | |||||
Total revenue | $ 1,089 | $ 1,062 | $ 1,048 | ||
[1] | Certain businesses do not agree to previously reported amounts due to changes in category classification. |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) shares in Millions, $ in Millions | Total | Common Stock [Member] | Paid-In Capital [Member] | Treasury Stock [Member] | Accumulated Other Comprehensive Loss [Member] | Retained Earnings [Member] | ||
Balance, beginning of period at Jan. 28, 2017 | $ 4 | $ 3,003 | $ (10,338) | $ (14) | [1] | $ 12,515 | ||
Treasury stock purchases | (306) | |||||||
Stock options and awards | 75 | (14) | ||||||
Net earnings | $ 859 | 859 | ||||||
Dividends paid | 7 | (375) | ||||||
Other comprehensive income | [1] | 3 | ||||||
Balance, end of period at Feb. 03, 2018 | $ 5,419 | $ 4 | 3,078 | $ (10,651) | (11) | [1] | 12,999 | |
Shares, beginning of period at Jan. 28, 2017 | 371 | (197) | ||||||
Treasury stock purchases | (8) | |||||||
Stock options and awards | 2 | |||||||
Shares, end of period at Feb. 03, 2018 | 168 | 373 | (205) | |||||
Dividends paid per common share | $ 2.20 | |||||||
Treasury stock purchases | $ (396) | |||||||
Stock options and awards | 126 | (34) | ||||||
Net earnings | $ 801 | 801 | ||||||
Dividends paid | 5 | (405) | ||||||
Other comprehensive income | [1] | $ 11 | ||||||
Balance, end of period at Feb. 02, 2019 | $ 5,527 | $ 4 | 3,204 | $ (11,076) | 13,395 | |||
Treasury stock purchases | (6) | |||||||
Stock options and awards | 1 | |||||||
Shares, end of period at Feb. 02, 2019 | 163 | 374 | (211) | |||||
Dividends paid per common share | $ 2.44 | |||||||
Change in accounting standard at Feb. 02, 2019 | [2] | 88 | ||||||
Treasury stock purchases | $ (470) | |||||||
Stock options and awards | 68 | (31) | ||||||
Net earnings | $ 691 | 691 | ||||||
Dividends paid | 6 | (429) | ||||||
Balance, end of period at Feb. 01, 2020 | $ 5,450 | $ 4 | $ 3,272 | $ (11,571) | $ 13,745 | |||
Treasury stock purchases | (8) | |||||||
Stock options and awards | 1 | |||||||
Shares, end of period at Feb. 01, 2020 | 156 | 375 | (219) | |||||
Dividends paid per common share | $ 2.68 | |||||||
[1] | Includes loss on interest rate derivative and reclassification adjustment for interest expense included in net income. Tax effects of interest rate derivatives were $1 million in 2018 and $2 million in 2017. | |||||||
[2] | Adoption of new lease accounting standard in 2019, refer to Note 3. |
CONSOLIDATED STATEMENTS OF CH_2
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Parenthetical) - USD ($) $ in Millions | 12 Months Ended | |
Feb. 02, 2019 | Feb. 03, 2018 | |
Statement Of Stockholders Equity [Abstract] | ||
Tax effect of interest rate derivatives | $ 1 | $ 2 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 12 Months Ended | ||
Feb. 01, 2020 | Feb. 02, 2019 | Feb. 03, 2018 | |
Operating activities | |||
Net income | $ 691 | $ 801 | $ 859 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 917 | 964 | 991 |
Share-based compensation | 56 | 87 | 55 |
Deferred income taxes | 51 | (31) | (61) |
Impairments, store closing and other costs | 64 | 72 | |
(Gain) loss on extinguishment of debt | (9) | 63 | |
Non-cash lease expense | 150 | ||
Other non-cash expense | 11 | 18 | 2 |
Changes in operating assets and liabilities: | |||
Merchandise inventories | (51) | 79 | 264 |
Other current and long-term assets | 24 | 72 | (81) |
Accounts payable | 19 | (84) | (236) |
Accrued and other long-term liabilities | (117) | 67 | (52) |
Income taxes | 7 | (1) | (50) |
Operating lease liabilities | (156) | ||
Net cash provided by operating activities | 1,657 | 2,107 | 1,691 |
Investing activities | |||
Acquisition of property and equipment | (855) | (578) | (672) |
Other | 18 | 6 | 23 |
Net cash used in investing activities | (837) | (572) | (649) |
Financing activities | |||
Treasury stock purchases | (470) | (396) | (306) |
Shares withheld for taxes on vested restricted shares | (31) | (34) | (14) |
Dividends paid | (423) | (400) | (368) |
Reduction of long-term borrowing | (6) | (943) | |
Premium paid on redemption of debt | (46) | ||
Finance lease and financing obligation payments | (113) | (126) | (138) |
Proceeds from stock option exercises | 1 | 36 | 18 |
Proceeds from financing obligations | 11 | ||
Net cash used in financing activities | (1,031) | (1,909) | (808) |
Net (decrease) increase in cash and cash equivalents | (211) | (374) | 234 |
Cash and cash equivalents at beginning of period | 934 | 1,308 | 1,074 |
Cash and cash equivalents at end of period | 723 | 934 | 1,308 |
Supplemental information | |||
Interest paid, net of capitalized interest | 193 | 282 | 297 |
Income taxes paid | 172 | 308 | 272 |
Property and equipment acquired through: | |||
Finance lease liabilities | 236 | 37 | 30 |
Operating lease liabilities | $ 106 | ||
Financing obligations | $ 4 | $ 12 |
Business and Summary of Account
Business and Summary of Accounting Policies | 12 Months Ended |
Feb. 01, 2020 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Business and Summary of Accounting Policies | 1. Business and Summary of Accounting Policies Business As of February 1, 2020, we operated 1,159 stores, a website ( www.Kohls.com Our authorized capital stock consists of 800 million shares of $0.01 par value common stock and 10 million shares of $0.01 par value preferred stock. Consolidation The consolidated financial statements include the accounts of Kohl’s Corporation and its subsidiaries including Kohl’s, Inc., its primary operating company. All intercompany accounts and transactions have been eliminated. Accounting Period Our fiscal year ends on the Saturday closest to January 31 st Fiscal year Ended Number of Weeks 2019 February 1, 2020 52 2018 February 2, 2019 52 2017 February 3, 2018 53 Use of Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. Cash and Cash Equivalents In addition to money market investments, cash equivalents include commercial paper and certificates of deposit with original maturities of three months or less. We carry these investments at cost which approximates fair value. Also included in cash and cash equivalents are amounts due from credit card transactions with settlement terms of less than five days. Credit and debit card receivables included within cash were $87 million at February 1, 2020 and $89 million at February 2, 2019. Merchandise Inventories Merchandise inventories are valued at the lower of cost or market using RIM. Under RIM, the valuation of inventory at cost and the resulting gross margins are calculated by applying a cost-to-retail ratio to the retail value of inventory. RIM is an averaging method that has been widely used in the retail industry due to its practicality. The use of RIM will result in inventory being valued at the lower of cost or market since permanent markdowns are taken as a reduction of the retail value of inventories. We would record an additional reserve if the future estimated selling price is less than cost. Property and Equipment Property and equipment consist of the following: (Dollars in Millions) Feb 1, 2020 Feb 2, 2019 Land $ 1,107 $ 1,110 Buildings and improvements: Owned 7,869 8,048 Leased 867 1,816 Fixtures and equipment 1,426 1,489 Information technology 2,806 2,628 Construction in progress 279 299 Total property and equipment, at cost 14,354 15,390 Less accumulated depreciation and amortization (7,002 ) (7,962 ) Property and equipment, net $ 7,352 $ 7,428 Construction in progress includes property and equipment which is not ready for its intended use. Property and equipment are recorded at cost, less accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets. Leased property and improvements to leased property are amortized on a straight-line basis over the term of the lease or useful life of the asset, whichever is less. As of February 1, 2020, we had assets held for sale of $24 million. Leases are further described in Note 3 of the Consolidated Financial Statements. The annual provisions for depreciation and amortization generally use the following ranges of useful lives: Buildings and improvements 5-40 years Fixtures and equipment 3-15 years Information technology 3-8 years Long-Lived Assets All property and equipment and other long-lived assets are reviewed for potential impairment when events or changes in circumstances indicate that the asset’s carrying value may not be recoverable. If such indicators are present, it is determined whether the sum of the estimated undiscounted future cash flows attributable to such assets is less than the carrying value of the assets. A potential impairment has occurred if projected future undiscounted cash flows are less than the carrying value of the assets. We recorded impairments of $73 million in 2019 and $72 million in 2018 in Impairments, store closing and other costs. Restructure Reserve The following table summarizes changes in the restructure reserve during 2019: (Dollars in Millions) Severance Balance - February 2, 2019 $ 31 Payments and reversals (34 ) Additions 30 Balance - February 1, 2020 $ 27 Charges related to corporate restructuring efforts are recorded in Impairments, store closing and other costs. Accrued Liabilities Accrued liabilities consist of the following: (Dollars in Millions) Feb 1, 2020 Feb 2, 2019 Gift cards and merchandise return cards $ 334 $ 330 Sales, property and use taxes 182 160 Payroll and related fringe benefits 101 154 Credit card liabilities 84 122 Accrued capital 104 117 Other 428 481 Accrued liabilities $ 1,233 $ 1,364 Self-Insurance We use a combination of insurance and self-insurance for a number of risks. We retain the initial risk of $500,000 per occurrence in workers’ compensation claims and $250,000 per occurrence in general liability claims. We record reserves for workers’ compensation and general liability claims which include the total amounts that we expect to pay for a fully developed loss and related expenses, such as fees paid to attorneys, experts and investigators. We are fully self-insured for employee-related health care benefits, a portion of which is paid by our associates. We use a third-party actuary to estimate the liabilities associated with workers’ compensation, general liability and employee-related health care risks. These liabilities include amounts for both reported claims and incurred, but not reported losses. The total liabilities, net of collateral held by third parties, for these risks were $79 million as of February 1, 2020 and $68 million as of February 2, 2019. For property losses we are subject to a $5 million self-insured retention (“SIR”). Maintenance deductibles (retained amount) apply in addition to the SIR as follows: for catastrophic claims such as earthquakes, floods and windstorms, the maintenance deductible varies from 2-5% of the insurance claim. Similarly, for other standard claims, such as fire and building damages, the maintenance deductible of $250,000 applies per occurrence for the property loss. All maintenance deductibles erode the $5 million SIR. Once the SIR is incurred the maintenance deductibles apply. Treasury Stock We account for repurchases of common stock and shares withheld in lieu of taxes when restricted stock vests using the cost method with common stock in treasury classified in the Consolidated Balance Sheets as a reduction of shareholders’ equity. Revenue Recognition Net Sales Net sales includes revenue from the sale of merchandise and shipping revenues. Net sales are recognized when merchandise is received by the customer and we have fulfilled all performance obligations. We do not have any sales that are recorded as commissions. The following table summarizes net sales by line of business: (Dollars in Millions) 2019 2018 (1) 2017 (1) Women's $ 5,289 $ 5,436 $ 5,436 Men's 4,072 4,075 3,994 Home 3,579 3,675 3,660 Children's 2,437 2,436 2,404 Footwear 1,822 1,846 1,820 Accessories 1,686 1,699 1,722 Net Sales $ 18,885 $ 19,167 $ 19,036 (1) Certain businesses do not agree to previously reported amounts due to changes in category classification. We maintain various rewards programs whereby customers earn rewards based on their spending and other promotional activities. The rewards are typically in the form of dollar-off discounts which can be used on future purchases. These programs create performance obligations which require us to defer a portion of the original sale until the rewards are redeemed. Sales are recorded net of returns. At the end of each reporting period, we record a reserve based on historical return rates and patterns which reverses sales that we expect to be returned in the following period. Revenue from the sale of Kohl's gift cards is recognized when the gift card is redeemed. Unredeemed gift card and merchandise return card liabilities totaled $334 million as of February 1, 2020 and $330 million as of February 2, 2019. Revenue of $189 million was recognized during 2019 from the February 1, 2019 balance. Net sales do not include sales tax as we are considered a pass-through conduit for collecting and remitting sales taxes. Other Revenue Other revenue consists primarily of revenue from our credit card operations, unredeemed gift cards and merchandise return cards (breakage), and other non-merchandise revenues. Revenue from credit card operations includes our share of the finance charges and interest fees, less charge-offs of the Kohl’s credit card pursuant to the Private Label Credit Card Program Agreement. Expenses related to our credit card operations are reported in SG&A. Revenue from unredeemed gift cards and merchandise return cards (breakage) is recorded in proportion and over the time period the cards are actually redeemed. Cost of Merchandise Sold and Selling, General and Administrative Expenses The following table illustrates the primary costs classified in Cost of Merchandise Sold and Selling, General and Administrative Expenses: Cost of Merchandise Sold Selling, General and Administrative Expenses • 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 • Depreciation of product development facilities and equipment • Compensation and benefit costs including: • Stores • Corporate headquarters, including buying and merchandising • Distribution centers • Occupancy and operating costs of our retail, distribution and corporate facilities • Expenses related to our Kohl’s credit card operations • Freight expenses associated with moving merchandise from our distribution centers to our retail stores and between distribution and retail facilities • Marketing expenses, offset by vendor payments for reimbursement of specific, incremental and identifiable costs • Other non-operating revenues and expenses The classification of these expenses varies across the retail industry. Vendor Allowances We receive consideration for a variety of vendor-sponsored programs, such as markdown allowances, volume rebates, and promotion and marketing support. The vendor consideration is recorded as earned either as a reduction of inventory costs or Selling, General and Administrative Expenses. Promotional and marketing allowances are intended to offset our marketing costs to promote vendors’ merchandise. Markdown allowances and volume rebates are recorded as a reduction of inventory costs. Fair Value Fair value measurements are required to be classified and disclosed in one of the following pricing categories: Level 1: Financial instruments with unadjusted, quoted prices listed on active market exchanges. Level 2: Financial instruments lacking unadjusted, quoted prices from active market exchanges, including over-the-counter traded financial instruments. The prices for the financial instruments are determined using prices for recently traded financial instruments with similar underlying terms as well as directly or indirectly observable inputs, such as interest rates and yield curves that are observable at commonly quoted intervals. Level 3: Financial instruments that are not actively traded on a market exchange. This category includes situations where there is little, if any, market activity for the financial instrument. The prices are determined using significant unobservable inputs or valuation techniques. Current assets and liabilities are reported at cost, which approximates fair value. Cash and cash equivalents are classified as Level 1 as carrying value approximates fair value because maturities are less than three months. Marketing Marketing costs are expensed when the marketing is first seen. Marketing costs, net of related vendor allowances, are as follows: (Dollars in Millions) 2019 2018 2017 Gross marketing costs $ 1,156 $ 1,133 $ 1,124 Vendor allowances (130 ) (143 ) (138 ) Net marketing costs $ 1,026 $ 990 $ 986 Net marketing costs as a percent of total revenue 5.1 % 4.9 % 4.9 % Income Taxes Income taxes are accounted for under the asset and liability method. Under this method, deferred tax assets and liabilities are recorded based on differences between the amounts of assets and liabilities recognized for financial reporting purposes and such amounts recognized for income tax purposes. Deferred tax assets and liabilities are calculated using the enacted tax rates and laws that are expected to be in effect when the differences are expected to reverse. We establish valuation allowances for deferred tax assets when we believe it is more likely than not that the asset will not be realizable for tax purposes. We recognize interest and penalty expense related to unrecognized tax benefits in our provision for income tax expense. Net Income Per Share Basic net income per share is net income divided by the average number of common shares outstanding during the period. Diluted net income per share includes incremental shares assumed for share-based awards. The information required to compute basic and diluted net income per share is as follows: (Dollars and Shares in Millions, Except per Share Data) 2019 2018 2017 Numerator—net income $ 691 $ 801 $ 859 Denominator—weighted average shares Basic 157 164 167 Impact of dilutive share-based awards 1 1 1 Diluted 158 165 168 Anti-dilutive shares/warrants 1 — 2 Net income per share: Basic $ 4.39 $ 4.88 $ 5.14 Diluted $ 4.37 $ 4.84 $ 5.12 Share-Based Awards Stock-based compensation expense is generally recognized on a straight-line basis over the vesting period based on the fair value of awards which are expected to vest. The fair value of all share-based awards is estimated on the date of grant. Recent Accounting Pronouncements The following table provides a brief description of issued, but not yet effective, accounting standards: Standard Description Effect on our Financial Statements Cloud Computing (ASU 2018-15) Issued August 2018 Effective Q1 2020 Under the new standard, costs related to a cloud computing arrangement will be deferred or expensed as incurred, in accordance with the existing internal-use software guidance for similar costs. The new standard also prescribes the balance sheet, income statement, and cash flow classification of the capitalized implementation costs and related amortization expense. We are evaluating the impact of the new standard and consider it to be generally consistent with our current accounting for cloud computing arrangements. We do not expect adoption will have a material impact on our financial statements. Current Expected Credit Losses (ASU 2016-13) Issued June 2016 Effective Q1 2020 Under the new standard, credit losses for financial assets measured at amortized cost should be determined based on the total current expected credit losses over the life of the financial asset or group of financial assets. The amendments will be applied using a modified retrospective approach with a cumulative-effect adjustment through retained earnings as of the beginning of the fiscal year upon adoption as required. We are evaluating the impact of the new standard, but believe it will not have a material impact on our financial statements. We do not expect revenue from our credit card operation will be materially impacted by the adoption of this standard. Income Taxes (ASU 2019-12) Issued December 2019 Effective Q1 2021 The new standard is designed to simplify the accounting for income taxes by removing certain exceptions to the general principles as outlined in U.S. GAAP. We are evaluating the impact of the new standard on our financial statements. g |
Debt
Debt | 12 Months Ended |
Feb. 01, 2020 | |
Debt Disclosure [Abstract] | |
Debt | 2. Debt Long-term debt includes the following unsecured senior debt: Outstanding Maturity (Dollars in Millions) Effective Rate Coupon Rate Feb 1, 2020 Feb 2, 2019 2023 3.25 % 3.25 % $ 350 $ 350 2023 4.78 % 4.75 % 184 184 2025 4.25 % 4.25 % 650 650 2029 7.36 % 7.25 % 42 42 2033 6.05 % 6.00 % 113 113 2037 6.89 % 6.88 % 101 101 2045 5.57 % 5.55 % 427 433 Outstanding long-term debt 1,867 1,873 Unamortized debt discounts and deferred financing costs (11 ) (12 ) Long-term debt $ 1,856 $ 1,861 Effective interest rate 4.74 % 4.74 % The estimated fair value of our long-term debt was $2.0 billion at February 1, 2020 and $1.8 billion at February 2, 2019, and would be classified as Level 1, financial instruments with unadjusted, quoted prices listed on active market exchanges. In 2019, we amended and extended our existing credit facility with various lenders which provides for a $1.0 billion senior unsecured five-year Our various debt agreements contain covenants including limitations on additional indebtedness and certain financial tests. As of February 1, 2020, we were in compliance with all covenants of the various debt agreements. We also had outstanding trade letters of credit totaling approximately $50 million |
Leases
Leases | 12 Months Ended |
Feb. 01, 2020 | |
Leases [Abstract] | |
Leases | 3. Leases Effective February 3, 2019 (the “adoption date”), we adopted ASC 842 Leases (the “new standard”). The new standard requires lessees to recognize a liability for lease obligations and a corresponding right of use asset on the balance sheet. The guidance also requires disclosure of key information about leasing arrangements that is intended to give financial statement users the ability to assess the amount, timing and potential uncertainty of cash flows related to leases. We The new standard includes several transition practical expedients that were available to reduce the burden of implementing the standard. • We elected the package of practical expedients, which among other things, allowed us to carry forward our historical lease classifications. • We did not elect the hindsight practical expedient which would have allowed us to revisit key assumptions, such as lease term, that were made when we originally entered into the lease. The following table summarizes changes in our Consolidated Balance Sheet upon adoption of the new standard: (Dollars in Millions) Assets Property and equipment, net $ (174 ) (a) Operating leases 2,446 (b) Other assets (32 ) (c) Total assets $ 2,240 Liabilities and Shareholders' Equity Finance lease and financing obligations $ (237 ) (a) Operating leases 2,771 (b) Accrued and other liabilities (413 ) (c) Deferred taxes 31 (d) Shareholders' equity 88 (d) Total liabilities and shareholders' equity $ 2,240 (a) The reductions are primarily due to historical failed sale-leaseback and build-to-suit arrangements where we were deemed the owner for accounting purposes. In accordance with ASC 842 transition provisions, they became operating or finance leases. (b) The increases include land and other operating leases which were not previously recorded on our balance sheet or were previously recorded as financing obligations. (c) The reductions are primarily due to the reclassification of lease-related assets and liabilities such as straight-line rent and reserves for closed stores to operating lease assets and liabilities. (d) The cumulative effect of lease adjustments, net of the deferred tax impact, was recorded as an adjustment to retained earnings. In addition, retained earnings includes a $26 million lease impairment charge. These adjustments represent non-cash activities for Statement of Cash Flow purposes. The adoption of the new lease accounting standard did not have a material impact on our net income. Finance and Operating 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 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. For leases that commenced prior to the adoption date, we used the February 3, 2019 rate for a term consistent with the original lease term for operating leases and the rate on the lease commencement date for finance leases. For leases with terms of 12 months or less, we elected the practical expedient to exclude them from the balance sheet and recognize expense on a straight-line basis over the lease term. For leases beginning, modified, or reassessed in 2019 and later, we elected the practical expedient to combine lease and non-lease components. The following tables summarize our operating and finance leases and where they are presented in our Consolidated Financial Statements: Consolidated Balance Sheet February 1, 2020 (Dollars in Millions) Classification Assets Operating leases Operating leases $ 2,391 Finance leases Property and equipment, net 672 Total operating and finance leases 3,063 Liabilities Current Operating leases Current portion of operating leases 158 Finance leases Current portion of finance lease and financing obligations 88 Noncurrent Operating leases Operating leases 2,619 Finance leases Finance lease and financing obligations 877 Total operating and finance leases $ 3,742 Consolidated Statement of Income 2019 (Dollars in Millions) Classification Operating leases Selling, general, and administrative $ 314 Finance leases Amortization of leased assets Depreciation and amortization 72 Interest on lease liabilities Interest expense, net 98 Total operating and finance leases $ 484 Rent expense charged to operations was $301 million for 2018 and $293 million for 2017. Consolidated Statement of Cash Flows 2019 (Dollars in Millions) Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 320 Operating cash flows from finance leases 98 Financing cash flows from finance leases 76 The following table summarizes future lease payments by fiscal year: February 1, 2020 (Dollars in Millions) Operating Leases Finance Leases Total 2020 $ 303 $ 181 $ 484 2021 303 162 465 2022 291 145 436 2023 276 124 400 2024 241 110 351 After 2024 3,426 1,750 5,176 Total lease payments 4,840 2,472 7,312 Amount representing interest (2,063 ) (1,507 ) (3,570 ) Lease liabilities $ 2,777 $ 965 $ 3,742 Total lease payments include $3.0 billion related to options to extend operating lease terms that are reasonably certain of being exercised and $1.5 billion related to options to extend finance lease terms that are reasonably certain of being exercised, and excludes $16.5 million of legally binding lease payments for leases signed, but not yet commenced. The following table summarizes weighted-average remaining lease term and discount rates: February 1, 2020 Weighted-average remaining term (years) Operating leases 20 Finance leases 17 Weighted-average discount rate Operating leases 6 % Finance leases 11 % Financing Obligations Historical failed sale-leasebacks that did not qualify for sale-leaseback accounting upon adoption of ASC 842 continue to be accounted for as financing obligations. The following tables summarize our financing obligations and where they are presented in our Consolidated Financial Statements: Consolidated Balance Sheet February 1, 2020 (Dollars in Millions) Classification Assets Financing obligations Property and equipment, net $ 76 Liabilities Current Current portion of finance lease and financing obligations 36 Noncurrent Finance lease and financing obligations 490 Total financing obligations $ 526 Consolidated Statement of Income 2019 (Dollars in Millions) Classification Amortization of financing obligation assets Depreciation and amortization $ 11 Interest on financing obligations Interest expense, net 37 Total financing obligations $ 48 Consolidated Statement of Cash Flows 2019 (Dollars in Millions) Cash paid for amounts included in the measurement of financing obligations Operating cash flows from financing obligations $ 37 Financing cash flows from financing obligations 37 Other financing obligations cash activity Proceeds from financing obligations 11 (Gain) on extinguishment of debt (9 ) In 2019, we purchased leased equipment that was accounted for as a financing obligation resulting in recognition of a $9 million gain on extinguishment of debt. The following table summarizes future financing obligation payments by fiscal year: (Dollars in Millions) February 1, 2020 2020 $ 69 2021 71 2022 68 2023 66 2024 60 After 2024 197 Total financing obligations payments 531 Non-cash gain on future sale of property 225 Amount representing interest (230 ) Financing obligation liability $ 526 Total payments exclude $16 million of legally binding payments for contracts signed, but not yet commenced. The February 1, 2020 Weighted-average remaining term (years) 9 Weighted-average discount rate 7 % |
Benefit Plans
Benefit Plans | 12 Months Ended |
Feb. 01, 2020 | |
Compensation And Retirement Disclosure [Abstract] | |
Benefit Plans | 4. Benefit Plans We have a defined contribution savings plan covering all full-time and certain part-time associates. Participants in this plan may invest up to 99% of their base compensation, subject to certain statutory limits. We match 100% of the first 5% of each participant’s contribution, subject to certain statutory limits. We also offer a non-qualified deferred compensation plan to a group of executives which provides for pre-tax compensation deferrals up to 75% of salary and 100% of bonus. Deferrals and credited investment returns are 100% vested. The total costs for these benefit plans were $51 million for 2019, $50 million for 2018, and $49 million for 2017. |
Income Taxes
Income Taxes | 12 Months Ended |
Feb. 01, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 5. Income Taxes Deferred income taxes consist of the following: Feb 1, 2020 Feb 2, 2019 (Dollars in Millions) Deferred tax liabilities: Property and equipment $ 611 $ 756 Lease assets 816 — Merchandise inventories 76 73 Total deferred tax liabilities 1,503 829 Deferred tax assets: Lease obligations 1,110 425 Accrued and other liabilities, including stock-based compensation 121 136 Accrued step rent liability — 79 Federal benefit on state tax reserves 30 29 Total deferred tax assets 1,261 669 Net deferred tax liability $ 242 $ 160 Deferred tax assets included in other long-term assets totaled $18 million as of February 1, 2020 and $24 million as of February 2, 2019. The components of the provision for income taxes were as follows: (Dollars in Millions) 2019 2018 2017 Current federal $ 128 $ 229 $ 299 Current state 31 43 26 Deferred federal 60 (36 ) (86 ) Deferred state (9 ) 5 19 Provision for income taxes $ 210 $ 241 $ 258 On December 22, 2017, H.R. 1, originally the Tax Cuts & Jobs Act, was signed into law making significant changes to the Internal Revenue Code. Changes include a corporate rate decrease from 35% to 21%, effective January 1, 2018, as well as a variety of other changes including the acceleration of expensing of certain business assets and reductions in the amount of executive pay that could qualify as a tax deduction. On December 22, 2017, Staff Accounting Bulletin No. 118 was issued to address the application of U.S. GAAP in situations when a registrant does not have the necessary information available, prepared or analyzed in reasonable detail to complete the accounting for certain income tax effects of the Act. As of December 22, 2018, all impacts of the Act were analyzed and recorded. Adjustments recorded in 2018 were not material. The effective tax rate differs from the amount that would be provided by applying the statutory U.S. corporate tax rate due to the following items: 2019 2018 2017 Provision at statutory rate 21.0 % 21.0 % 33.7 % State income taxes, net of federal tax benefit 3.2 3.8 1.0 Re-measurement of deferred tax assets and liabilities — — (10.9 ) Other federal tax credits (1.2 ) (1.0 ) (0.7 ) Other 0.3 (0.6 ) — Provision for income taxes 23.3 % 23.2 % 23.1 % The re-measurement of deferred tax assets and liabilities in 2017 includes the following impacts: • Revaluation of deferred taxes that existed on December 22, 2017, the enactment date of the Act. • Deferred taxes that were created after December 22, 2017. These items were deducted at the federal statutory rate of 33.7%, but will reverse at the 21% rate We have analyzed filing positions in all of the federal and state jurisdictions where we are required to file income tax returns, as well as all open tax years in these jurisdictions. The federal returns subject to examination are the 2008 through 2019 tax years, excluding the 2014 tax year. State returns subject to examination vary depending upon the state. Generally, 2015 through 2019 tax years are subject to state examination. The earliest state open period is 2007. Certain states have proposed adjustments, which we are currently appealing. If we do not prevail on our appeals, we do not anticipate that the adjustments would result in a material change in our financial position. A reconciliation of the beginning and ending gross amount of unrecognized tax benefits is as follows: (Dollars in Millions) 2019 2018 Balance at beginning of year $ 133 $ 135 Increases due to tax positions taken in prior years 7 — Increases due to tax positions taken in current year 12 13 Decreases due to: Tax positions taken in prior years (14 ) (3 ) Settlements with taxing authorities — (3 ) Lapse of applicable statute of limitations (3 ) (9 ) Balance at end of year $ 135 $ 133 Not included in the unrecognized tax benefits reconciliation above are gross unrecognized accrued interest and penalties of $35 million at February 1, 2020 and $31 million at February 2, 2019. Interest and penalty expenses were $4 million in 2019, $5 million in 2018, and $4 million in 2017. Our total unrecognized tax benefits that, if recognized, would affect our effective tax rate were $112 million as of February 1, 2020 and $110 million as of February 2, 2019. It is reasonably possible that our unrecognized tax positions may change within the next 12 months, primarily as a result of ongoing audits. While it is possible that one or more of these examinations may be resolved in the next year, it is not anticipated that a significant impact to the unrecognized tax benefit balance will occur. We have both payables and receivables for current income taxes recorded on our balance sheet. Receivables included in other current assets totaled $15 million as of February 1, 2020 and $29 million as of February 2, 2019. |
Stock-Based Awards
Stock-Based Awards | 12 Months Ended |
Feb. 01, 2020 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock-Based Awards | 6. Stock-Based Awards We currently grant share-based compensation pursuant to the Kohl’s Corporation 2017 Long-Term Compensation Plan, which provides for the granting of various forms of equity-based awards, including nonvested stock, performance share units and options to purchase shares of our common stock, to officers, key employees and directors. As of February 1, 2020, there were 9.0 million shares authorized and 8.5 million shares available for grant under the 2017 Long-Term Compensation Plan. Options and nonvested stock that are surrendered or terminated without issuance of shares are available for future grants. We also have outstanding options and other awards which were granted under previous compensation plans. Annual grants are typically made in the first quarter of the fiscal year. Grants to newly-hired and promoted employees and other discretionary grants are made periodically throughout the remainder of the year. Stock Options The majority of stock options granted to employees vest in five equal annual installments. Outstanding options granted to employees prior to 2006 have a term of up to 15 years. Outstanding options granted to employees after 2005 have a term of seven years. Outstanding options granted to directors have a term of 10 years. All stock options have an exercise price equal to the fair market value of the common stock on the date of grant. The fair value of each option award was estimated using a Black-Scholes option valuation model. The following table summarizes our stock option activity: 2019 2018 2017 (Shares in Thousands) Shares Weighted Average Exercise Price Shares Weighted Average Exercise Price Shares Weighted Average Exercise Price Balance at beginning of year 136 $ 51.48 1,139 $ 50.51 2,350 $ 53.29 Exercised (46 ) 50.88 (1,001 ) 50.37 (359 ) 50.94 Forfeited/expired (3 ) 51.50 (2 ) 53.52 (852 ) 58.00 Balance at end of year 87 $ 51.78 136 $ 51.48 1,139 $ 50.51 The intrinsic value of options exercised represents the excess of our stock price at the time the option was exercised over the exercise price and was $1 million in 2019, $16 million in 2018, and $3 million in 2017. The stock options outstanding as of February 1, 2020 are all exercisable. They have a weighted average remaining contractual life of 0.9 years and no intrinsic value. Our closing stock price of $42.75 on February 1, 2020 is less than the exercise price of the remaining options. Nonvested Stock Awards We have also awarded shares of nonvested common stock to eligible key employees and to our Board of Directors. Substantially all awards have restriction periods tied primarily to employment and/or service. Employee awards generally vest over five years. Director awards vest over the term to which the director was elected, generally one year. In lieu of cash dividends, holders of nonvested stock awards are granted restricted stock equivalents which vest consistently with the underlying nonvested stock awards. The fair value of nonvested stock awards is the closing price of our common stock on the date of grant. We may acquire shares from employees in lieu of amounts required to satisfy minimum tax withholding requirements upon the vesting of the employee’s unvested stock award. Such shares are then designated as treasury shares. The following table summarizes nonvested stock activity, including restricted stock equivalents issued in lieu of cash dividends: 2019 2018 2017 (Shares in Thousands) Shares Weighted Average Grant Date Fair Value Shares Weighted Average Grant Date Fair Value Shares Weighted Average Grant Date Fair Value Balance at beginning of year 2,601 $ 51.90 2,811 $ 45.60 2,163 $ 52.75 Granted 917 63.57 1,086 63.25 1,624 39.69 Vested (1,004 ) 50.06 (1,202 ) 47.69 (772 ) 52.14 Forfeited (202 ) 57.71 (94 ) 49.08 (204 ) 59.58 Balance at end of year 2,312 $ 56.24 2,601 $ 51.90 2,811 $ 45.60 The aggregate fair value of awards at the time of vesting was $50 million in 2019, $57 million in 2018 and $40 million in 2017. Performance Share Units We grant performance-based share units ("performance share units") to certain executives. The performance measurement period for these performance share units is three fiscal years. The fair market value of the grants is determined using a Monte-Carlo valuation on the date of grant. The actual number of shares which will be earned at the end of the three-year vesting periods will vary based on our cumulative financial performance over the vesting periods. The number of performance share units earned will be modified up or down based on Kohl’s Relative Total Shareholder Return against a defined peer group during the vesting periods . The payouts, if earned, will be settled in Kohl's common stock after the end of each multi-year performance periods. The following table summarizes performance share unit activity by year: 2019 2018 2017 (Shares in Thousands) Shares Weighted Average Grant Date Fair Value Shares Weighted Average Grant Date Fair Value Shares Weighted Average Grant Date Fair Value Balance at beginning of year 1,046 $ 52.08 724 $ 46.07 512 $ 57.80 Granted 665 69.30 365 66.66 429 43.32 Vested (336 ) 46.87 (38 ) 78.35 (106 ) 57.58 Forfeited (101 ) 63.41 (5 ) 46.91 (111 ) 78.35 Balance at end of year 1,274 $ 61.55 1,046 $ 52.08 724 $ 46.07 Stock Warrants Effective April 18, 2019, in connection with our entry into a commercial agreement with Amazon.com Services, Inc. (“Amazon”), we issued warrants to an affiliate of Amazon, to purchase up to 1,747,441 shares of our common stock at an exercise price of $69.68, subject to customary anti-dilution provisions. The fair value was estimated to be $17.52 per warrant using a binomial lattice method. The warrants vest in five equal annual installments. The first installment vested on January 15, 2020. Total vested and unvested shares as of February 1, 2020 were 349,489 and 1,397,952, respectively. The warrants will expire on April 18, 2026. Unvested warrants will not vest if the commercial agreement is terminated, not renewed, or if no substitute written returns arrangement is entered into between the parties. Other Required Disclosures Stock-based compensation expense, other than that included in Impairments, store closing and other costs, is included in Selling, general and administrative expenses in our Consolidated Statements of Income. Stock-based compensation expense totaled $56 million for 2019, $87 million for 2018 and $55 million for 2017. At February 1, 2020, we had approximately $89 million of unrecognized share-based compensation expense, which is expected to be recognized over a weighted-average period of 1.3 years. |
Contingencies
Contingencies | 12 Months Ended |
Feb. 01, 2020 | |
Commitments And Contingencies Disclosure [Abstract] | |
Contingencies | 7. Contingencies We are subject to legal proceedings and claims arising out of the conduct of our business, including claims both by and against us. Such proceedings typically involve claims related to various forms of liability, contract disputes, allegations of violations of laws or regulations or other actions brought by us or others including our employees, consumers, competitors, suppliers or governmental agencies. We routinely assess the likelihood of any adverse outcomes related to these matters on a case by case basis, as well as the potential ranges of losses and fees. We establish accruals for our potential exposure, as appropriate, for significant claims against us when losses become probable and reasonably estimable. Where we are able to reasonably estimate a range of potential losses relating to significant matters, we record the amount within that range that constitutes our best estimate. We also disclose the nature of and range of loss for claims against us when losses are reasonably possible and material. These accruals and disclosures are determined based on the facts and circumstances related to the individual cases and require estimates and judgments regarding the interpretation of facts and laws, as well as the effectiveness of strategies or other factors beyond our control. |
Quarterly Financial Information
Quarterly Financial Information (Unaudited) | 12 Months Ended |
Feb. 01, 2020 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Information (Unaudited) | 8. Quarterly Financial Information (Unaudited) 2019 (Dollars and Shares in Millions, Except per Share Data) First Second Third Fourth Total revenue $ 4,087 $ 4,430 $ 4,625 $ 6,832 Cost of merchandise sold $ 2,415 $ 2,550 $ 2,775 $ 4,400 Selling, general and administrative expenses $ 1,275 $ 1,269 $ 1,419 $ 1,742 (Gain) loss on extinguishment of debt — — $ (9 ) — Impairments, store closing and other costs $ 49 $ 7 — $ 57 Net income $ 62 $ 241 $ 123 $ 265 Basic shares 161 159 156 154 Basic net income per share $ 0.38 $ 1.52 $ 0.79 $ 1.72 Diluted shares 162 159 157 154 Diluted net income per share $ 0.38 $ 1.51 $ 0.78 $ 1.72 2018 (Dollars and Shares in Millions, Except per Share Data) First Second Third Fourth Total revenue $ 4,208 $ 4,570 $ 4,628 $ 6,823 Cost of merchandise sold $ 2,496 $ 2,605 $ 2,752 $ 4,345 Selling, general and administrative expenses $ 1,259 $ 1,272 $ 1,375 $ 1,694 (Gain) loss on extinguishment of debt $ 42 — — $ 21 Impairments, store closing and other costs — — — $ 104 Net income $ 75 $ 292 $ 161 $ 272 Basic shares 165 165 164 162 Basic net income per share $ 0.46 $ 1.77 $ 0.98 $ 1.68 Diluted shares 167 166 165 163 Diluted net income per share $ 0.45 $ 1.76 $ 0.98 $ 1.67 Due to changes in stock prices during the year and timing of share repurchases and issuances, the sum of quarterly net income per share may not equal the annual net income per share. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Feb. 01, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | 9. Subsequent Events In March 2020, the World Health Organization declared the outbreak of a novel coronavirus (COVID-19) as a pandemic, which continues to spread throughout the United States. As a result, we have temporarily closed some retail locations, reduced store operating hours, and have seen a reduction in consumer traffic, all resulting in a negative impact to Company sales. While the disruption is currently expected to be temporary, there is uncertainty around the duration. Therefore, while we expect this matter to negatively impact our business, results of operations, and financial position, the related financial impact cannot be reasonably estimated at this time. As a result, the Company is leveraging its balance sheet and has fully drawn its $1 billion unsecured credit facility to increase its cash position and help preserve its financial flexibility. |
Business and Summary of Accou_2
Business and Summary of Accounting Policies (Policies) | 12 Months Ended |
Feb. 01, 2020 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Business | Business As of February 1, 2020, we operated 1,159 stores, a website ( www.Kohls.com Our authorized capital stock consists of 800 million shares of $0.01 par value common stock and 10 million shares of $0.01 par value preferred stock. |
Consolidation | Consolidation The consolidated financial statements include the accounts of Kohl’s Corporation and its subsidiaries including Kohl’s, Inc., its primary operating company. All intercompany accounts and transactions have been eliminated. |
Accounting Period | Accounting Period Our fiscal year ends on the Saturday closest to January 31 st |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. |
Cash and Cash Equivalents | Cash and Cash Equivalents In addition to money market investments, cash equivalents include commercial paper and certificates of deposit with original maturities of three months or less. We carry these investments at cost which approximates fair value. Also included in cash and cash equivalents are amounts due from credit card transactions with settlement terms of less than five days. Credit and debit card receivables included within cash were $87 million at February 1, 2020 and $89 million at February 2, 2019. |
Merchandise Inventories | Merchandise Inventories Merchandise inventories are valued at the lower of cost or market using RIM. Under RIM, the valuation of inventory at cost and the resulting gross margins are calculated by applying a cost-to-retail ratio to the retail value of inventory. RIM is an averaging method that has been widely used in the retail industry due to its practicality. The use of RIM will result in inventory being valued at the lower of cost or market since permanent markdowns are taken as a reduction of the retail value of inventories. We would record an additional reserve if the future estimated selling price is less than cost. |
Property and Equipment | Property and Equipment Property and equipment consist of the following: (Dollars in Millions) Feb 1, 2020 Feb 2, 2019 Land $ 1,107 $ 1,110 Buildings and improvements: Owned 7,869 8,048 Leased 867 1,816 Fixtures and equipment 1,426 1,489 Information technology 2,806 2,628 Construction in progress 279 299 Total property and equipment, at cost 14,354 15,390 Less accumulated depreciation and amortization (7,002 ) (7,962 ) Property and equipment, net $ 7,352 $ 7,428 Construction in progress includes property and equipment which is not ready for its intended use. Property and equipment are recorded at cost, less accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets. Leased property and improvements to leased property are amortized on a straight-line basis over the term of the lease or useful life of the asset, whichever is less. As of February 1, 2020, we had assets held for sale of $24 million. Leases are further described in Note 3 of the Consolidated Financial Statements. The annual provisions for depreciation and amortization generally use the following ranges of useful lives: Buildings and improvements 5-40 years Fixtures and equipment 3-15 years Information technology 3-8 years |
Long-Lived Assets | Long-Lived Assets All property and equipment and other long-lived assets are reviewed for potential impairment when events or changes in circumstances indicate that the asset’s carrying value may not be recoverable. If such indicators are present, it is determined whether the sum of the estimated undiscounted future cash flows attributable to such assets is less than the carrying value of the assets. A potential impairment has occurred if projected future undiscounted cash flows are less than the carrying value of the assets. We recorded impairments of $73 million in 2019 and $72 million in 2018 in Impairments, store closing and other costs. |
Restructure Reserve | Restructure Reserve The following table summarizes changes in the restructure reserve during 2019: (Dollars in Millions) Severance Balance - February 2, 2019 $ 31 Payments and reversals (34 ) Additions 30 Balance - February 1, 2020 $ 27 Charges related to corporate restructuring efforts are recorded in Impairments, store closing and other costs. |
Accrued Liabilities | Accrued Liabilities Accrued liabilities consist of the following: (Dollars in Millions) Feb 1, 2020 Feb 2, 2019 Gift cards and merchandise return cards $ 334 $ 330 Sales, property and use taxes 182 160 Payroll and related fringe benefits 101 154 Credit card liabilities 84 122 Accrued capital 104 117 Other 428 481 Accrued liabilities $ 1,233 $ 1,364 |
Self Insurance | Self-Insurance We use a combination of insurance and self-insurance for a number of risks. We retain the initial risk of $500,000 per occurrence in workers’ compensation claims and $250,000 per occurrence in general liability claims. We record reserves for workers’ compensation and general liability claims which include the total amounts that we expect to pay for a fully developed loss and related expenses, such as fees paid to attorneys, experts and investigators. We are fully self-insured for employee-related health care benefits, a portion of which is paid by our associates. We use a third-party actuary to estimate the liabilities associated with workers’ compensation, general liability and employee-related health care risks. These liabilities include amounts for both reported claims and incurred, but not reported losses. The total liabilities, net of collateral held by third parties, for these risks were $79 million as of February 1, 2020 and $68 million as of February 2, 2019. For property losses we are subject to a $5 million self-insured retention (“SIR”). Maintenance deductibles (retained amount) apply in addition to the SIR as follows: for catastrophic claims such as earthquakes, floods and windstorms, the maintenance deductible varies from 2-5% of the insurance claim. Similarly, for other standard claims, such as fire and building damages, the maintenance deductible of $250,000 applies per occurrence for the property loss. All maintenance deductibles erode the $5 million SIR. Once the SIR is incurred the maintenance deductibles apply. |
Treasury Stock | Treasury Stock We account for repurchases of common stock and shares withheld in lieu of taxes when restricted stock vests using the cost method with common stock in treasury classified in the Consolidated Balance Sheets as a reduction of shareholders’ equity. |
Revenue Recognition | Revenue Recognition Net Sales Net sales includes revenue from the sale of merchandise and shipping revenues. Net sales are recognized when merchandise is received by the customer and we have fulfilled all performance obligations. We do not have any sales that are recorded as commissions. The following table summarizes net sales by line of business: (Dollars in Millions) 2019 2018 (1) 2017 (1) Women's $ 5,289 $ 5,436 $ 5,436 Men's 4,072 4,075 3,994 Home 3,579 3,675 3,660 Children's 2,437 2,436 2,404 Footwear 1,822 1,846 1,820 Accessories 1,686 1,699 1,722 Net Sales $ 18,885 $ 19,167 $ 19,036 (1) Certain businesses do not agree to previously reported amounts due to changes in category classification. We maintain various rewards programs whereby customers earn rewards based on their spending and other promotional activities. The rewards are typically in the form of dollar-off discounts which can be used on future purchases. These programs create performance obligations which require us to defer a portion of the original sale until the rewards are redeemed. Sales are recorded net of returns. At the end of each reporting period, we record a reserve based on historical return rates and patterns which reverses sales that we expect to be returned in the following period. Revenue from the sale of Kohl's gift cards is recognized when the gift card is redeemed. Unredeemed gift card and merchandise return card liabilities totaled $334 million as of February 1, 2020 and $330 million as of February 2, 2019. Revenue of $189 million was recognized during 2019 from the February 1, 2019 balance. Net sales do not include sales tax as we are considered a pass-through conduit for collecting and remitting sales taxes. Other Revenue Other revenue consists primarily of revenue from our credit card operations, unredeemed gift cards and merchandise return cards (breakage), and other non-merchandise revenues. Revenue from credit card operations includes our share of the finance charges and interest fees, less charge-offs of the Kohl’s credit card pursuant to the Private Label Credit Card Program Agreement. Expenses related to our credit card operations are reported in SG&A. Revenue from unredeemed gift cards and merchandise return cards (breakage) is recorded in proportion and over the time period the cards are actually redeemed. |
Cost of Merchandise Sold and Selling, General and Administrative Expenses | Cost of Merchandise Sold and Selling, General and Administrative Expenses The following table illustrates the primary costs classified in Cost of Merchandise Sold and Selling, General and Administrative Expenses: Cost of Merchandise Sold Selling, General and Administrative Expenses • 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 • Depreciation of product development facilities and equipment • Compensation and benefit costs including: • Stores • Corporate headquarters, including buying and merchandising • Distribution centers • Occupancy and operating costs of our retail, distribution and corporate facilities • Expenses related to our Kohl’s credit card operations • Freight expenses associated with moving merchandise from our distribution centers to our retail stores and between distribution and retail facilities • Marketing expenses, offset by vendor payments for reimbursement of specific, incremental and identifiable costs • Other non-operating revenues and expenses The classification of these expenses varies across the retail industry. |
Vendor Allowances | Vendor Allowances We receive consideration for a variety of vendor-sponsored programs, such as markdown allowances, volume rebates, and promotion and marketing support. The vendor consideration is recorded as earned either as a reduction of inventory costs or Selling, General and Administrative Expenses. Promotional and marketing allowances are intended to offset our marketing costs to promote vendors’ merchandise. Markdown allowances and volume rebates are recorded as a reduction of inventory costs. |
Fair Value | Fair Value Fair value measurements are required to be classified and disclosed in one of the following pricing categories: Level 1: Financial instruments with unadjusted, quoted prices listed on active market exchanges. Level 2: Financial instruments lacking unadjusted, quoted prices from active market exchanges, including over-the-counter traded financial instruments. The prices for the financial instruments are determined using prices for recently traded financial instruments with similar underlying terms as well as directly or indirectly observable inputs, such as interest rates and yield curves that are observable at commonly quoted intervals. Level 3: Financial instruments that are not actively traded on a market exchange. This category includes situations where there is little, if any, market activity for the financial instrument. The prices are determined using significant unobservable inputs or valuation techniques. Current assets and liabilities are reported at cost, which approximates fair value. Cash and cash equivalents are classified as Level 1 as carrying value approximates fair value because maturities are less than three months. |
Marketing | Marketing Marketing costs are expensed when the marketing is first seen. Marketing costs, net of related vendor allowances, are as follows: (Dollars in Millions) 2019 2018 2017 Gross marketing costs $ 1,156 $ 1,133 $ 1,124 Vendor allowances (130 ) (143 ) (138 ) Net marketing costs $ 1,026 $ 990 $ 986 Net marketing costs as a percent of total revenue 5.1 % 4.9 % 4.9 % |
Income taxes | Income Taxes Income taxes are accounted for under the asset and liability method. Under this method, deferred tax assets and liabilities are recorded based on differences between the amounts of assets and liabilities recognized for financial reporting purposes and such amounts recognized for income tax purposes. Deferred tax assets and liabilities are calculated using the enacted tax rates and laws that are expected to be in effect when the differences are expected to reverse. We establish valuation allowances for deferred tax assets when we believe it is more likely than not that the asset will not be realizable for tax purposes. We recognize interest and penalty expense related to unrecognized tax benefits in our provision for income tax expense. |
Net Income Per Share | Net Income Per Share Basic net income per share is net income divided by the average number of common shares outstanding during the period. Diluted net income per share includes incremental shares assumed for share-based awards. The information required to compute basic and diluted net income per share is as follows: (Dollars and Shares in Millions, Except per Share Data) 2019 2018 2017 Numerator—net income $ 691 $ 801 $ 859 Denominator—weighted average shares Basic 157 164 167 Impact of dilutive share-based awards 1 1 1 Diluted 158 165 168 Anti-dilutive shares/warrants 1 — 2 Net income per share: Basic $ 4.39 $ 4.88 $ 5.14 Diluted $ 4.37 $ 4.84 $ 5.12 |
Share-Based Awards | Share-Based Awards Stock-based compensation expense is generally recognized on a straight-line basis over the vesting period based on the fair value of awards which are expected to vest. The fair value of all share-based awards is estimated on the date of grant. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements The following table provides a brief description of issued, but not yet effective, accounting standards: Standard Description Effect on our Financial Statements Cloud Computing (ASU 2018-15) Issued August 2018 Effective Q1 2020 Under the new standard, costs related to a cloud computing arrangement will be deferred or expensed as incurred, in accordance with the existing internal-use software guidance for similar costs. The new standard also prescribes the balance sheet, income statement, and cash flow classification of the capitalized implementation costs and related amortization expense. We are evaluating the impact of the new standard and consider it to be generally consistent with our current accounting for cloud computing arrangements. We do not expect adoption will have a material impact on our financial statements. Current Expected Credit Losses (ASU 2016-13) Issued June 2016 Effective Q1 2020 Under the new standard, credit losses for financial assets measured at amortized cost should be determined based on the total current expected credit losses over the life of the financial asset or group of financial assets. The amendments will be applied using a modified retrospective approach with a cumulative-effect adjustment through retained earnings as of the beginning of the fiscal year upon adoption as required. We are evaluating the impact of the new standard, but believe it will not have a material impact on our financial statements. We do not expect revenue from our credit card operation will be materially impacted by the adoption of this standard. Income Taxes (ASU 2019-12) Issued December 2019 Effective Q1 2021 The new standard is designed to simplify the accounting for income taxes by removing certain exceptions to the general principles as outlined in U.S. GAAP. We are evaluating the impact of the new standard on our financial statements. |
Business and Summary of Accou_3
Business and Summary of Accounting Policies (Tables) | 12 Months Ended |
Feb. 01, 2020 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Schedule of Fiscal Period | The following fiscal periods are presented in these notes: Fiscal year Ended Number of Weeks 2019 February 1, 2020 52 2018 February 2, 2019 52 2017 February 3, 2018 53 |
Schedule of Property and Equipment | Property and equipment consist of the following: (Dollars in Millions) Feb 1, 2020 Feb 2, 2019 Land $ 1,107 $ 1,110 Buildings and improvements: Owned 7,869 8,048 Leased 867 1,816 Fixtures and equipment 1,426 1,489 Information technology 2,806 2,628 Construction in progress 279 299 Total property and equipment, at cost 14,354 15,390 Less accumulated depreciation and amortization (7,002 ) (7,962 ) Property and equipment, net $ 7,352 $ 7,428 |
Ranges of Useful Lives | The annual provisions for depreciation and amortization generally use the following ranges of useful lives: Buildings and improvements 5-40 years Fixtures and equipment 3-15 years Information technology 3-8 years |
Summary of Changes in Restructure Reserve | The following table summarizes changes in the restructure reserve during 2019: (Dollars in Millions) Severance Balance - February 2, 2019 $ 31 Payments and reversals (34 ) Additions 30 Balance - February 1, 2020 $ 27 |
Schedule of Accrued Liabilities | Accrued liabilities consist of the following: (Dollars in Millions) Feb 1, 2020 Feb 2, 2019 Gift cards and merchandise return cards $ 334 $ 330 Sales, property and use taxes 182 160 Payroll and related fringe benefits 101 154 Credit card liabilities 84 122 Accrued capital 104 117 Other 428 481 Accrued liabilities $ 1,233 $ 1,364 |
Schedule of Net Sales by Line of Business | The following table summarizes net sales by line of business: (Dollars in Millions) 2019 2018 (1) 2017 (1) Women's $ 5,289 $ 5,436 $ 5,436 Men's 4,072 4,075 3,994 Home 3,579 3,675 3,660 Children's 2,437 2,436 2,404 Footwear 1,822 1,846 1,820 Accessories 1,686 1,699 1,722 Net Sales $ 18,885 $ 19,167 $ 19,036 (1) Certain businesses do not agree to previously reported amounts due to changes in category classification. |
Schedule of Marketing Costs, Net of Related Vendor Allowances | Marketing costs are expensed when the marketing is first seen. Marketing costs, net of related vendor allowances, are as follows: (Dollars in Millions) 2019 2018 2017 Gross marketing costs $ 1,156 $ 1,133 $ 1,124 Vendor allowances (130 ) (143 ) (138 ) Net marketing costs $ 1,026 $ 990 $ 986 Net marketing costs as a percent of total revenue 5.1 % 4.9 % 4.9 % |
Computation of Basic and Diluted Net Income Per Share | The information required to compute basic and diluted net income per share is as follows: (Dollars and Shares in Millions, Except per Share Data) 2019 2018 2017 Numerator—net income $ 691 $ 801 $ 859 Denominator—weighted average shares Basic 157 164 167 Impact of dilutive share-based awards 1 1 1 Diluted 158 165 168 Anti-dilutive shares/warrants 1 — 2 Net income per share: Basic $ 4.39 $ 4.88 $ 5.14 Diluted $ 4.37 $ 4.84 $ 5.12 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Feb. 01, 2020 | |
Debt Disclosure [Abstract] | |
Components of Long-term Debt | Long-term debt includes the following unsecured senior debt: Outstanding Maturity (Dollars in Millions) Effective Rate Coupon Rate Feb 1, 2020 Feb 2, 2019 2023 3.25 % 3.25 % $ 350 $ 350 2023 4.78 % 4.75 % 184 184 2025 4.25 % 4.25 % 650 650 2029 7.36 % 7.25 % 42 42 2033 6.05 % 6.00 % 113 113 2037 6.89 % 6.88 % 101 101 2045 5.57 % 5.55 % 427 433 Outstanding long-term debt 1,867 1,873 Unamortized debt discounts and deferred financing costs (11 ) (12 ) Long-term debt $ 1,856 $ 1,861 Effective interest rate 4.74 % 4.74 % |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Feb. 01, 2020 | |
Summary of Operating and Finance Leases | The following tables summarize our operating and finance leases and where they are presented in our Consolidated Financial Statements: Consolidated Balance Sheet February 1, 2020 (Dollars in Millions) Classification Assets Operating leases Operating leases $ 2,391 Finance leases Property and equipment, net 672 Total operating and finance leases 3,063 Liabilities Current Operating leases Current portion of operating leases 158 Finance leases Current portion of finance lease and financing obligations 88 Noncurrent Operating leases Operating leases 2,619 Finance leases Finance lease and financing obligations 877 Total operating and finance leases $ 3,742 Consolidated Statement of Income 2019 (Dollars in Millions) Classification Operating leases Selling, general, and administrative $ 314 Finance leases Amortization of leased assets Depreciation and amortization 72 Interest on lease liabilities Interest expense, net 98 Total operating and finance leases $ 484 Consolidated Statement of Cash Flows 2019 (Dollars in Millions) Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 320 Operating cash flows from finance leases 98 Financing cash flows from finance leases 76 |
Summary of Future Lease Payments | The following table summarizes future lease payments by fiscal year: February 1, 2020 (Dollars in Millions) Operating Leases Finance Leases Total 2020 $ 303 $ 181 $ 484 2021 303 162 465 2022 291 145 436 2023 276 124 400 2024 241 110 351 After 2024 3,426 1,750 5,176 Total lease payments 4,840 2,472 7,312 Amount representing interest (2,063 ) (1,507 ) (3,570 ) Lease liabilities $ 2,777 $ 965 $ 3,742 |
Summary of Weighted-Average Remaining Lease Term and Discount Rates | The following table summarizes weighted-average remaining lease term and discount rates: February 1, 2020 Weighted-average remaining term (years) Operating leases 20 Finance leases 17 Weighted-average discount rate Operating leases 6 % Finance leases 11 % |
Summary of Financing Obligations | The following tables summarize our financing obligations and where they are presented in our Consolidated Financial Statements: Consolidated Balance Sheet February 1, 2020 (Dollars in Millions) Classification Assets Financing obligations Property and equipment, net $ 76 Liabilities Current Current portion of finance lease and financing obligations 36 Noncurrent Finance lease and financing obligations 490 Total financing obligations $ 526 Consolidated Statement of Income 2019 (Dollars in Millions) Classification Amortization of financing obligation assets Depreciation and amortization $ 11 Interest on financing obligations Interest expense, net 37 Total financing obligations $ 48 Consolidated Statement of Cash Flows 2019 (Dollars in Millions) Cash paid for amounts included in the measurement of financing obligations Operating cash flows from financing obligations $ 37 Financing cash flows from financing obligations 37 Other financing obligations cash activity Proceeds from financing obligations 11 (Gain) on extinguishment of debt (9 ) |
Summary of Future Financing Obligation Payments | The following table summarizes future financing obligation payments by fiscal year: (Dollars in Millions) February 1, 2020 2020 $ 69 2021 71 2022 68 2023 66 2024 60 After 2024 197 Total financing obligations payments 531 Non-cash gain on future sale of property 225 Amount representing interest (230 ) Financing obligation liability $ 526 |
Summary of Weighted-Average Remaining Term and Discount Rate for Financing Obligations | The February 1, 2020 Weighted-average remaining term (years) 9 Weighted-average discount rate 7 % |
ASU No. 2016-02 [Member] | |
Summary of Changes in Consolidated Balance Sheet upon Adoption of New Standard | The following table summarizes changes in our Consolidated Balance Sheet upon adoption of the new standard: (Dollars in Millions) Assets Property and equipment, net $ (174 ) (a) Operating leases 2,446 (b) Other assets (32 ) (c) Total assets $ 2,240 Liabilities and Shareholders' Equity Finance lease and financing obligations $ (237 ) (a) Operating leases 2,771 (b) Accrued and other liabilities (413 ) (c) Deferred taxes 31 (d) Shareholders' equity 88 (d) Total liabilities and shareholders' equity $ 2,240 (a) The reductions are primarily due to historical failed sale-leaseback and build-to-suit arrangements where we were deemed the owner for accounting purposes. In accordance with ASC 842 transition provisions, they became operating or finance leases. (b) The increases include land and other operating leases which were not previously recorded on our balance sheet or were previously recorded as financing obligations. (c) The reductions are primarily due to the reclassification of lease-related assets and liabilities such as straight-line rent and reserves for closed stores to operating lease assets and liabilities. (d) The cumulative effect of lease adjustments, net of the deferred tax impact, was recorded as an adjustment to retained earnings. In addition, retained earnings includes a $26 million lease impairment charge. |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Feb. 01, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Deferred Income Taxes | Deferred income taxes consist of the following: Feb 1, 2020 Feb 2, 2019 (Dollars in Millions) Deferred tax liabilities: Property and equipment $ 611 $ 756 Lease assets 816 — Merchandise inventories 76 73 Total deferred tax liabilities 1,503 829 Deferred tax assets: Lease obligations 1,110 425 Accrued and other liabilities, including stock-based compensation 121 136 Accrued step rent liability — 79 Federal benefit on state tax reserves 30 29 Total deferred tax assets 1,261 669 Net deferred tax liability $ 242 $ 160 |
Schedule of Components of Provision for Income Taxes | The components of the provision for income taxes were as follows: (Dollars in Millions) 2019 2018 2017 Current federal $ 128 $ 229 $ 299 Current state 31 43 26 Deferred federal 60 (36 ) (86 ) Deferred state (9 ) 5 19 Provision for income taxes $ 210 $ 241 $ 258 |
Schedule of Items Affecting Statutory Corporate Tax Rate | The effective tax rate differs from the amount that would be provided by applying the statutory U.S. corporate tax rate due to the following items: 2019 2018 2017 Provision at statutory rate 21.0 % 21.0 % 33.7 % State income taxes, net of federal tax benefit 3.2 3.8 1.0 Re-measurement of deferred tax assets and liabilities — — (10.9 ) Other federal tax credits (1.2 ) (1.0 ) (0.7 ) Other 0.3 (0.6 ) — Provision for income taxes 23.3 % 23.2 % 23.1 % |
Schedule of Reconciliation of Gross Amount of Unrecognized Tax Benefits | A reconciliation of the beginning and ending gross amount of unrecognized tax benefits is as follows: (Dollars in Millions) 2019 2018 Balance at beginning of year $ 133 $ 135 Increases due to tax positions taken in prior years 7 — Increases due to tax positions taken in current year 12 13 Decreases due to: Tax positions taken in prior years (14 ) (3 ) Settlements with taxing authorities — (3 ) Lapse of applicable statute of limitations (3 ) (9 ) Balance at end of year $ 135 $ 133 |
Stock-Based Awards (Tables)
Stock-Based Awards (Tables) | 12 Months Ended |
Feb. 01, 2020 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Summary of stock option activity | The following table summarizes our stock option activity: 2019 2018 2017 (Shares in Thousands) Shares Weighted Average Exercise Price Shares Weighted Average Exercise Price Shares Weighted Average Exercise Price Balance at beginning of year 136 $ 51.48 1,139 $ 50.51 2,350 $ 53.29 Exercised (46 ) 50.88 (1,001 ) 50.37 (359 ) 50.94 Forfeited/expired (3 ) 51.50 (2 ) 53.52 (852 ) 58.00 Balance at end of year 87 $ 51.78 136 $ 51.48 1,139 $ 50.51 |
Summary of nonvested stock activity | The following table summarizes nonvested stock activity, including restricted stock equivalents issued in lieu of cash dividends: 2019 2018 2017 (Shares in Thousands) Shares Weighted Average Grant Date Fair Value Shares Weighted Average Grant Date Fair Value Shares Weighted Average Grant Date Fair Value Balance at beginning of year 2,601 $ 51.90 2,811 $ 45.60 2,163 $ 52.75 Granted 917 63.57 1,086 63.25 1,624 39.69 Vested (1,004 ) 50.06 (1,202 ) 47.69 (772 ) 52.14 Forfeited (202 ) 57.71 (94 ) 49.08 (204 ) 59.58 Balance at end of year 2,312 $ 56.24 2,601 $ 51.90 2,811 $ 45.60 |
Summary of Performance Share Activity | The following table summarizes performance share unit activity by year: 2019 2018 2017 (Shares in Thousands) Shares Weighted Average Grant Date Fair Value Shares Weighted Average Grant Date Fair Value Shares Weighted Average Grant Date Fair Value Balance at beginning of year 1,046 $ 52.08 724 $ 46.07 512 $ 57.80 Granted 665 69.30 365 66.66 429 43.32 Vested (336 ) 46.87 (38 ) 78.35 (106 ) 57.58 Forfeited (101 ) 63.41 (5 ) 46.91 (111 ) 78.35 Balance at end of year 1,274 $ 61.55 1,046 $ 52.08 724 $ 46.07 |
Quarterly Financial Informati_2
Quarterly Financial Information (Unaudited) (Tables) | 12 Months Ended |
Feb. 01, 2020 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Quarterly Financial Data | 2019 (Dollars and Shares in Millions, Except per Share Data) First Second Third Fourth Total revenue $ 4,087 $ 4,430 $ 4,625 $ 6,832 Cost of merchandise sold $ 2,415 $ 2,550 $ 2,775 $ 4,400 Selling, general and administrative expenses $ 1,275 $ 1,269 $ 1,419 $ 1,742 (Gain) loss on extinguishment of debt — — $ (9 ) — Impairments, store closing and other costs $ 49 $ 7 — $ 57 Net income $ 62 $ 241 $ 123 $ 265 Basic shares 161 159 156 154 Basic net income per share $ 0.38 $ 1.52 $ 0.79 $ 1.72 Diluted shares 162 159 157 154 Diluted net income per share $ 0.38 $ 1.51 $ 0.78 $ 1.72 2018 (Dollars and Shares in Millions, Except per Share Data) First Second Third Fourth Total revenue $ 4,208 $ 4,570 $ 4,628 $ 6,823 Cost of merchandise sold $ 2,496 $ 2,605 $ 2,752 $ 4,345 Selling, general and administrative expenses $ 1,259 $ 1,272 $ 1,375 $ 1,694 (Gain) loss on extinguishment of debt $ 42 — — $ 21 Impairments, store closing and other costs — — — $ 104 Net income $ 75 $ 292 $ 161 $ 272 Basic shares 165 165 164 162 Basic net income per share $ 0.46 $ 1.77 $ 0.98 $ 1.68 Diluted shares 167 166 165 163 Diluted net income per share $ 0.45 $ 1.76 $ 0.98 $ 1.67 |
Business and Summary of Accou_4
Business and Summary of Accounting Policies - Additional Information (Details) | 12 Months Ended | |
Feb. 01, 2020USD ($)StoreOutlet$ / sharesshares | Feb. 02, 2019USD ($) | |
Business And Summary Of Accounting Policies [Line Items] | ||
Number of stores | Store | 1,159 | |
Number of FILA outlets | Outlet | 12 | |
Authorized common stock | shares | 800,000,000 | |
Common stock, par value | $ / shares | $ 0.01 | |
Preferred stock, shares authorized | shares | 10,000,000 | |
Preferred stock, par value | $ / shares | $ 0.01 | |
Credit and debit card receivables | $ 87,000,000 | $ 89,000,000 |
Assets held for sale | 24,000,000 | |
Impairment of property and equipment and other long-lived assets | 73,000,000 | 72,000,000 |
Estimated Total Self Insurance Related liabilities, net of collateral held by third parties | 79,000,000 | 68,000,000 |
Value of insurance risk retained | $ 5,000,000 | |
Maintenance deductible as a percent of losses, minimum | 2.00% | |
Maintenance deductible as a percent of losses, maximum | 5.00% | |
Maintenance deductible | $ 5,000,000 | |
Rewards Program unredeemed gift cards and merchandise return cards | 334,000,000 | $ 330,000,000 |
Net Sales [Member] | ||
Business And Summary Of Accounting Policies [Line Items] | ||
Revenue recognized | 189,000,000 | |
6321 Accident and Health Insurance [Member] | ||
Business And Summary Of Accounting Policies [Line Items] | ||
Value of initial insurance risk retained | 500,000 | |
General Liability [Member] | ||
Business And Summary Of Accounting Policies [Line Items] | ||
Value of initial insurance risk retained | 250,000 | |
524126 Direct Property and Casualty Insurance Carriers [Member] | ||
Business And Summary Of Accounting Policies [Line Items] | ||
Value of insurance risk retained | $ 250,000 |
Business and Summary of Accou_5
Business and Summary of Accounting Policies - Schedule of Fiscal Period (Details) | 12 Months Ended | ||
Feb. 01, 2020 | Feb. 02, 2019 | Feb. 03, 2018 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |||
Weeks in reporting period | 364 days | 364 days | 371 days |
Business and Summary of Accou_6
Business and Summary of Accounting Policies - Schedule of Property and Equipment (Details) - USD ($) $ in Millions | Feb. 01, 2020 | Feb. 02, 2019 |
Property, Plant and Equipment [Line Items] | ||
Land | $ 1,107 | $ 1,110 |
Fixtures and equipment | 1,426 | 1,489 |
Information technology | 2,806 | 2,628 |
Construction in progress | 279 | 299 |
Total property and equipment, at cost | 14,354 | 15,390 |
Less accumulated depreciation and amortization | (7,002) | (7,962) |
Property and equipment, net | 7,352 | 7,428 |
Owned [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Buildings and Improvements, Gross | 7,869 | 8,048 |
Leased [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Investment Building and Improvements, Gross | $ 867 | $ 1,816 |
Business and Summary of Accou_7
Business and Summary of Accounting Policies - Ranges of Useful Lives (Details) | 12 Months Ended |
Feb. 01, 2020 | |
Minimum [Member] | Building Improvements [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 5 years |
Minimum [Member] | Fixtures and Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 3 years |
Minimum [Member] | Information Technology [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 3 years |
Maximum [Member] | Building Improvements [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 40 years |
Maximum [Member] | Fixtures and Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 15 years |
Maximum [Member] | Information Technology [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 8 years |
Business and Summary of Accou_8
Business and Summary of Accounting Policies - Summary of Changes in Restructure Reserve (Details) - Employee Severance [Member] $ in Millions | 12 Months Ended |
Feb. 01, 2020USD ($) | |
Restructuring Cost And Reserve [Line Items] | |
Restructuring Reserve | $ 31 |
Payments and reversals | (34) |
Additions | 30 |
Restructuring Reserve | $ 27 |
Business and Summary of Accou_9
Business and Summary of Accounting Policies - Schedule of Accrued Liabilities (Details) - USD ($) $ in Millions | Feb. 01, 2020 | Feb. 02, 2019 |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | ||
Gift cards and merchandise return cards | $ 334 | $ 330 |
Sales, property and use taxes | 182 | 160 |
Payroll and related fringe benefits | 101 | 154 |
Credit card liabilities | 84 | 122 |
Accrued capital | 104 | 117 |
Other | 428 | 481 |
Accrued liabilities | $ 1,233 | $ 1,364 |
Business and Summary of Acco_10
Business and Summary of Accounting Policies - Schedule of Net Sales by Line of Business (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||||
Feb. 02, 2020 | Nov. 02, 2019 | Aug. 02, 2019 | May 02, 2019 | Feb. 02, 2019 | Nov. 03, 2018 | Aug. 04, 2018 | May 05, 2018 | Feb. 01, 2020 | Feb. 02, 2019 | Feb. 03, 2018 | |||
Disaggregation Of Revenue [Line Items] | |||||||||||||
Total revenue | $ 6,832 | $ 4,625 | $ 4,430 | $ 4,087 | $ 6,823 | $ 4,628 | $ 4,570 | $ 4,208 | $ 19,974 | $ 20,229 | $ 20,084 | ||
Net Sales [Member] | |||||||||||||
Disaggregation Of Revenue [Line Items] | |||||||||||||
Total revenue | 18,885 | 19,167 | [1] | 19,036 | [1] | ||||||||
Net Sales [Member] | Women's [Member] | |||||||||||||
Disaggregation Of Revenue [Line Items] | |||||||||||||
Total revenue | 5,289 | 5,436 | [1] | 5,436 | [1] | ||||||||
Net Sales [Member] | Men's [Member] | |||||||||||||
Disaggregation Of Revenue [Line Items] | |||||||||||||
Total revenue | 4,072 | 4,075 | [1] | 3,994 | [1] | ||||||||
Net Sales [Member] | Home [Member] | |||||||||||||
Disaggregation Of Revenue [Line Items] | |||||||||||||
Total revenue | 3,579 | 3,675 | [1] | 3,660 | [1] | ||||||||
Net Sales [Member] | Children's [Member] | |||||||||||||
Disaggregation Of Revenue [Line Items] | |||||||||||||
Total revenue | 2,437 | 2,436 | [1] | 2,404 | [1] | ||||||||
Net Sales [Member] | Footwear [Member] | |||||||||||||
Disaggregation Of Revenue [Line Items] | |||||||||||||
Total revenue | 1,822 | 1,846 | [1] | 1,820 | [1] | ||||||||
Net Sales [Member] | Accessories [Member] | |||||||||||||
Disaggregation Of Revenue [Line Items] | |||||||||||||
Total revenue | $ 1,686 | $ 1,699 | [1] | $ 1,722 | [1] | ||||||||
[1] | Certain businesses do not agree to previously reported amounts due to changes in category classification. |
Business and Summary of Acco_11
Business and Summary of Accounting Policies - Schedule of Marketing Costs, Net of Related Vendor Allowances (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Feb. 01, 2020 | Feb. 02, 2019 | Feb. 03, 2018 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |||
Advertising Costs Exclusive Of Vendor Allowances | $ 1,156 | $ 1,133 | $ 1,124 |
Allowances Received From Vendors For Advertising Expenses Incurred | (130) | (143) | (138) |
Advertising Expense | $ 1,026 | $ 990 | $ 986 |
Net Advertising To Net Revenue | 5.10% | 4.90% | 4.90% |
Business and Summary of Acco_12
Business and Summary of Accounting Policies - Computation of Basic and Diluted Net Income Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Feb. 02, 2020 | Nov. 02, 2019 | Aug. 02, 2019 | May 02, 2019 | Feb. 02, 2019 | Nov. 03, 2018 | Aug. 04, 2018 | May 05, 2018 | Feb. 01, 2020 | Feb. 02, 2019 | Feb. 03, 2018 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |||||||||||
Numerator—net income | $ 265 | $ 123 | $ 241 | $ 62 | $ 272 | $ 161 | $ 292 | $ 75 | $ 691 | $ 801 | $ 859 |
Denominator - weighted average shares, Basic | 154 | 156 | 159 | 161 | 162 | 164 | 165 | 165 | 157 | 164 | 167 |
Impact of dilutive share-based awards | 1 | 1 | 1 | ||||||||
Weighted average shares, Diluted | 154 | 157 | 159 | 162 | 163 | 165 | 166 | 167 | 158 | 165 | 168 |
Anti-dilutive shares/warrants | 1 | 2 | |||||||||
Basic | $ 1.72 | $ 0.79 | $ 1.52 | $ 0.38 | $ 1.68 | $ 0.98 | $ 1.77 | $ 0.46 | $ 4.39 | $ 4.88 | $ 5.14 |
Diluted | $ 1.72 | $ 0.78 | $ 1.51 | $ 0.38 | $ 1.67 | $ 0.98 | $ 1.76 | $ 0.45 | $ 4.37 | $ 4.84 | $ 5.12 |
Debt - Components of Long-term
Debt - Components of Long-term Debt (Details) - USD ($) $ in Millions | Feb. 01, 2020 | Feb. 02, 2019 |
Debt Instrument [Line Items] | ||
Effective interest rate | 4.74% | 4.74% |
Outstanding | $ 1,867 | $ 1,873 |
Unamortized debt discounts and deferred financing costs | (11) | (12) |
Long-term debt | $ 1,856 | 1,861 |
Senior Notes [Member] | Senior Notes Due 2023 [Member] | ||
Debt Instrument [Line Items] | ||
Effective interest rate | 3.25% | |
Debt Instrument, Interest Rate, Stated Percentage | 3.25% | |
Outstanding | $ 350 | 350 |
Senior Notes [Member] | Senior Notes 4.78% Due 2023 [Member] | ||
Debt Instrument [Line Items] | ||
Effective interest rate | 4.78% | |
Debt Instrument, Interest Rate, Stated Percentage | 4.75% | |
Outstanding | $ 184 | 184 |
Senior Notes [Member] | Senior Notes Due 2025 [Member] | ||
Debt Instrument [Line Items] | ||
Effective interest rate | 4.25% | |
Debt Instrument, Interest Rate, Stated Percentage | 4.25% | |
Outstanding | $ 650 | 650 |
Senior Notes [Member] | Senior Notes Due 2029 [Member] | ||
Debt Instrument [Line Items] | ||
Effective interest rate | 7.36% | |
Debt Instrument, Interest Rate, Stated Percentage | 7.25% | |
Outstanding | $ 42 | 42 |
Senior Notes [Member] | Senior Notes Due 2033 [Member] | ||
Debt Instrument [Line Items] | ||
Effective interest rate | 6.05% | |
Debt Instrument, Interest Rate, Stated Percentage | 6.00% | |
Outstanding | $ 113 | 113 |
Senior Notes [Member] | Senior Notes Due 2037 [Member] | ||
Debt Instrument [Line Items] | ||
Effective interest rate | 6.89% | |
Debt Instrument, Interest Rate, Stated Percentage | 6.88% | |
Outstanding | $ 101 | 101 |
Senior Notes [Member] | Senior Notes Due 2045 [Member] | ||
Debt Instrument [Line Items] | ||
Effective interest rate | 5.57% | |
Debt Instrument, Interest Rate, Stated Percentage | 5.55% | |
Outstanding | $ 427 | $ 433 |
Debt - Additional Information (
Debt - Additional Information (Details) | 12 Months Ended | |||
Feb. 01, 2020USD ($)Bank | Feb. 02, 2019USD ($) | Feb. 02, 2020USD ($) | Feb. 01, 2019USD ($) | |
Debt Instrument [Line Items] | ||||
Long-term Debt, Fair Value | $ 2,000,000,000 | $ 1,800,000,000 | ||
Reduction of long-term borrowings | 6,000,000 | $ 943,000,000 | ||
Trade Letters of Credit and Stand-By Letters of Credit [Member] | ||||
Debt Instrument [Line Items] | ||||
Outstanding amount | $ 50,000,000 | |||
Number of Banks With Uncommitted Lines | Bank | 2 | |||
Senior Notes [Member] | Revolving Credit Facility [Member] | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing Capacity | $ 1,000,000,000 | |||
Debt instrument, term | 5 years | |||
Debt instrument, maturity date | 2024-07 | |||
Debt instrument, maturity date description | In 2019, we amended and extended our existing credit facility with various lenders which provides for a $1.0 billion senior unsecured five-year revolving credit facility that will mature in July 2024. | |||
Outstanding amount | $ 0 | $ 0 | ||
Senior Notes [Member] | Repurchased on Open Market [Member] | ||||
Debt Instrument [Line Items] | ||||
Reduction of long-term borrowings | $ 6,000,000 |
Leases - Summary of Changes in
Leases - Summary of Changes in Consolidated Balance Sheet upon Adoption of New Standard (Details) - USD ($) $ in Millions | Feb. 01, 2020 | Feb. 03, 2019 | Feb. 02, 2019 | Feb. 03, 2018 | |
Assets | |||||
Property and equipment, net | $ 7,352 | $ 7,428 | |||
Operating leases | 2,391 | ||||
Other assets | 163 | 206 | |||
Total assets | 14,555 | 12,469 | |||
Liabilities and Shareholders’ Equity | |||||
Operating leases | 2,777 | ||||
Deferred income taxes | 260 | 184 | |||
Shareholders' equity | 5,450 | 5,527 | $ 5,419 | ||
Total liabilities and shareholders’ equity | $ 14,555 | $ 12,469 | |||
ASU No. 2016-02 [Member] | Impact of Adoption [Member] | |||||
Assets | |||||
Property and equipment, net | [1] | $ (174) | |||
Operating leases | [2] | 2,446 | |||
Other assets | [3] | (32) | |||
Total assets | 2,240 | ||||
Liabilities and Shareholders’ Equity | |||||
Finance lease and financing obligations | [1] | (237) | |||
Operating leases | [2] | 2,771 | |||
Accrued and other liabilities | [3] | (413) | |||
Deferred income taxes | [4] | 31 | |||
Shareholders' equity | [4] | 88 | |||
Total liabilities and shareholders’ equity | $ 2,240 | ||||
[1] | The reductions are primarily due to historical failed sale-leaseback and build-to-suit arrangements where we were deemed the owner for accounting purposes. In accordance with ASC 842 transition provisions, they became operating or finance leases. | ||||
[2] | The increases include land and other operating leases which were not previously recorded on our balance sheet or were previously recorded as financing obligations. | ||||
[3] | The reductions are primarily due to the reclassification of lease-related assets and liabilities such as straight-line rent and reserves for closed stores to operating lease assets and liabilities. | ||||
[4] | The cumulative effect of lease adjustments, net of the deferred tax impact, was recorded as an adjustment to retained earnings. In addition, retained earnings includes a $26 million lease impairment charge. |
Leases - Summary of Changes i_2
Leases - Summary of Changes in Consolidated Balance Sheet upon Adoption of New Standard (Parenthetical) (Details) $ in Millions | Feb. 03, 2019USD ($) |
ASU No. 2016-02 [Member] | Retained Earnings [Member] | |
Lessee Lease Description [Line Items] | |
Lease impairment charge | $ 26 |
Leases - Additional Information
Leases - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Feb. 02, 2020 | Nov. 02, 2019 | Aug. 02, 2019 | May 02, 2019 | Feb. 02, 2019 | Nov. 03, 2018 | Aug. 04, 2018 | May 05, 2018 | Feb. 01, 2020 | Feb. 02, 2019 | Feb. 03, 2018 | |
Leases [Line Items] | |||||||||||
Rent expense charged | $ 301 | $ 293 | |||||||||
Operating lease option to extend reasonably certain of being exercised | $ 3,000 | ||||||||||
Finance lease option to extend reasonably certain of being exercised | 1,500 | ||||||||||
Legally binding lease payments for leases signed but not yet commenced | 16.5 | ||||||||||
Gain on extinguishment of debt | $ 0 | $ 9 | $ 0 | $ 0 | $ (21) | $ 0 | $ 0 | $ (42) | 9 | $ (63) | |
Finance lease legally binding payments for contract signed but not yet commenced | $ 16 | ||||||||||
Store [Member] | |||||||||||
Leases [Line Items] | |||||||||||
Lease extension term | 5 years | ||||||||||
Minimum [Member] | Store [Member] | |||||||||||
Leases [Line Items] | |||||||||||
Lease initial term | 20 years | ||||||||||
Lease renewal term | 4 years | ||||||||||
Maximum [Member] | Store [Member] | |||||||||||
Leases [Line Items] | |||||||||||
Lease initial term | 25 years | ||||||||||
Lease renewal term | 8 years |
Leases - Summary of Operating a
Leases - Summary of Operating and Finance Leases (Details) $ in Millions | 12 Months Ended |
Feb. 01, 2020USD ($) | |
Assets | |
Operating leases | $ 2,391 |
Finance leases | $ 672 |
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | us-gaap:PropertyPlantAndEquipmentNet |
Total operating and finance leases | $ 3,063 |
Current liabilities: | |
Operating leases | 158 |
Finance leases | $ 88 |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible List] | kss:FinanceLeaseLiabilityAndFinancingObligationCurrent |
Noncurrent | |
Operating leases | $ 2,619 |
Finance leases | $ 877 |
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | kss:FinanceLeaseLiabilityAndFinancingObligationNoncurrent |
Total operating and finance leases | $ 3,742 |
Income Statement | |
Operating leases | 314 |
Finance leases | |
Amortization of leased assets | 72 |
Interest on lease liabilities | 98 |
Total operating and finance leases | 484 |
Cash paid for amounts included in the measurement of lease liabilities | |
Operating cash flows from operating leases | 320 |
Operating cash flows from finance leases | 98 |
Financing cash flows from finance leases | $ 76 |
Leases - Summary of Future Leas
Leases - Summary of Future Lease Payments (Details) $ in Millions | Feb. 01, 2020USD ($) |
Leases [Abstract] | |
Operating Leases, 2020 | $ 303 |
Operating Leases, 2021 | 303 |
Operating Leases, 2022 | 291 |
Operating Leases, 2023 | 276 |
Operating Leases, 2024 | 241 |
Operating Leases, After 2023 | 3,426 |
Total lease payments, Operating Leases | 4,840 |
Amount representing interest, Operating Leases | (2,063) |
Lease liabilities, Operating Leases | 2,777 |
Finance Leases, 2020 | 181 |
Finance Leases, 2021 | 162 |
Finance Leases, 2022 | 145 |
Finance Leases, 2023 | 124 |
Finance Leases, 2024 | 110 |
Finance Leases, After 2023 | 1,750 |
Total lease payments, Finance Leases | 2,472 |
Amount representing interest, Finance Leases | (1,507) |
Lease liabilities, Finance Leases | 965 |
2020 | 484 |
2021 | 465 |
2022 | 436 |
2023 | 400 |
2024 | 351 |
After 2024 | 5,176 |
Total lease payments | 7,312 |
Amount representing interest | (3,570) |
Lease liabilities | $ 3,742 |
Leases - Summary of Weighted-Av
Leases - Summary of Weighted-Average Remaining Lease Term and Discount Rates (Details) | Feb. 01, 2020 |
Leases [Abstract] | |
Operating leases, Weighted-average remaining term (years) | 20 years |
Finance leases, Weighted-average remaining term (years) | 17 years |
Operating leases, Weighted-average discount rate | 6.00% |
Finance leases, Weighted-average discount rate | 11.00% |
Leases - Summary of Financing O
Leases - Summary of Financing Obligations (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||||||||
Feb. 02, 2020 | Nov. 02, 2019 | Aug. 02, 2019 | May 02, 2019 | Feb. 02, 2019 | Nov. 03, 2018 | Aug. 04, 2018 | May 05, 2018 | Feb. 01, 2020 | Feb. 02, 2019 | |
Assets | ||||||||||
Financing obligations | $ 76 | |||||||||
Liabilities | ||||||||||
Current | 36 | |||||||||
Noncurrent | 490 | |||||||||
Total financing obligations | 526 | |||||||||
Income Statement | ||||||||||
Amortization of financing obligation assets | 11 | |||||||||
Interest on financing obligations | 37 | |||||||||
Total financing obligations | 48 | |||||||||
Cash paid for amounts included in the measurement of financing obligations | ||||||||||
Operating cash flows from financing obligations | 37 | |||||||||
Financing cash flows from financing obligations | 37 | |||||||||
Proceeds from financing obligations | 11 | |||||||||
(Gain) on extinguishment of debt | $ 0 | $ (9) | $ 0 | $ 0 | $ 21 | $ 0 | $ 0 | $ 42 | $ (9) | $ 63 |
Leases - Summary of Future Fina
Leases - Summary of Future Financing Obligation Payments (Details) $ in Millions | Feb. 01, 2020USD ($) |
Leases [Abstract] | |
2020 | $ 69 |
2021 | 71 |
2022 | 68 |
2023 | 66 |
2024 | 60 |
After 2024 | 197 |
Total financing obligations payments | 531 |
Non-cash gain on future sale of property | 225 |
Amount representing interest | (230) |
Total financing obligations | $ 526 |
Leases - Summary of Weighted-_2
Leases - Summary of Weighted-Average Remaining Term and Discount Rate for Financing Obligations (Details) | 12 Months Ended |
Feb. 01, 2020 | |
Leases [Abstract] | |
Weighted-average remaining term (years) | 9 years |
Weighted-average discount rate | 7.00% |
Benefit Plans Benefit Plans (De
Benefit Plans Benefit Plans (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Feb. 01, 2020 | Feb. 02, 2019 | Feb. 03, 2018 | |
Compensation And Retirement Disclosure [Abstract] | |||
Percentage of maximum investment by participant | 99.00% | ||
Increase in percentage of participants 100% contribution fully matched per participants | 5.00% | ||
Non-qualified deferred compensation plan pre-tax compensation deferrals | 75.00% | ||
Deferrals and credited investment returns vesting percentage | 100.00% | ||
Employee Stock Ownership Plan, Defined Contribution Plan, Non-Qualified Deferred Compensation Plan | $ 51 | $ 50 | $ 49 |
Income Taxes - Schedule of Comp
Income Taxes - Schedule of Components of Deferred Income Taxes (Details) - USD ($) $ in Millions | Feb. 01, 2020 | Feb. 02, 2019 |
Deferred tax liabilities: | ||
Property and equipment | $ 611 | $ 756 |
Lease assets | 816 | |
Merchandise inventories | 76 | 73 |
Total deferred tax liabilities | 1,503 | 829 |
Deferred tax assets: | ||
Lease obligations | 1,110 | 425 |
Accrued and other liabilities, including stock-based compensation | 121 | 136 |
Accrued step rent liability | 79 | |
Federal benefit on state tax reserves | 30 | 29 |
Total deferred tax assets | 1,261 | 669 |
Net deferred tax liability | $ 242 | $ 160 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Feb. 01, 2020 | Feb. 02, 2019 | Feb. 03, 2018 | Jan. 28, 2017 | |
Income Tax Examination [Line Items] | ||||
Deferred tax asset | $ 1,261 | $ 669 | ||
Federal statutory rate | 21.00% | 21.00% | 33.70% | 35.00% |
Income Tax Examination, Penalties and Interest Accrued | $ 35 | $ 31 | ||
Income Tax Examination, Penalties and Interest Expense | 4 | 5 | $ 4 | |
Unrecognized tax benefits that would impact effective tax rate | 112 | 110 | ||
Income Taxes Receivable, Current | $ 15 | 29 | ||
Earliest Tax Year [Member] | ||||
Income Tax Examination [Line Items] | ||||
Open Tax Year | 2007 | |||
Federal [Member] | Earliest Tax Year [Member] | ||||
Income Tax Examination [Line Items] | ||||
Open Tax Year | 2008 | |||
Federal [Member] | Latest Tax Year [Member] | ||||
Income Tax Examination [Line Items] | ||||
Open Tax Year | 2019 | |||
State and Local [Member] | Earliest Tax Year [Member] | ||||
Income Tax Examination [Line Items] | ||||
Open Tax Year | 2015 | |||
State and Local [Member] | Latest Tax Year [Member] | ||||
Income Tax Examination [Line Items] | ||||
Open Tax Year | 2019 | |||
Other Long-term Assets [Member] | ||||
Income Tax Examination [Line Items] | ||||
Deferred tax asset | $ 18 | $ 24 |
Income Taxes - Schedule of Co_2
Income Taxes - Schedule of Components of Provision for Income Taxes (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Feb. 01, 2020 | Feb. 02, 2019 | Feb. 03, 2018 | |
Income Tax Disclosure [Abstract] | |||
Current federal | $ 128 | $ 229 | $ 299 |
Current state | 31 | 43 | 26 |
Deferred federal | 60 | (36) | (86) |
Deferred state | (9) | 5 | 19 |
Provision for income taxes | $ 210 | $ 241 | $ 258 |
Income Taxes - Schedule of Item
Income Taxes - Schedule of Items Affecting Statutory Corporate Tax Rate (Details) | 12 Months Ended | |||
Feb. 01, 2020 | Feb. 02, 2019 | Feb. 03, 2018 | Jan. 28, 2017 | |
Income Tax Disclosure [Abstract] | ||||
Provision at statutory rate | 21.00% | 21.00% | 33.70% | 35.00% |
State income taxes, net of federal tax benefit | 3.20% | 3.80% | 1.00% | |
Re-measurement of deferred tax assets and liabilities | (10.90%) | |||
Other federal tax credits | (1.20%) | (1.00%) | (0.70%) | |
Other | 0.30% | (0.60%) | ||
Provision for income taxes | 23.30% | 23.20% | 23.10% |
Income Taxes - Schedule of Reco
Income Taxes - Schedule of Reconciliation of Gross Amount of Unrecognized Tax Benefits (Details) - USD ($) $ in Millions | 12 Months Ended | |
Feb. 01, 2020 | Feb. 02, 2019 | |
Income Tax Disclosure [Abstract] | ||
Balance at beginning of year | $ 133 | $ 135 |
Increases due to tax positions taken in prior years | 7 | |
Increases due to tax positions taken in current year | 12 | 13 |
Decreases due to tax positions taken in prior years | (14) | (3) |
Decreases due to settlements with taxing authorities | (3) | |
Decreases due to lapse of applicable statute of limitations | (3) | (9) |
Balance at end of year | $ 135 | $ 133 |
Stock-Based Awards - Additional
Stock-Based Awards - Additional Information (Details) | Apr. 18, 2019Installment$ / sharesshares | Feb. 01, 2020USD ($)Installment$ / sharesshares | Feb. 02, 2019USD ($) | Feb. 03, 2018USD ($) |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Authorized | shares | 9,000,000 | |||
Available for grant | shares | 8,500,000 | |||
Number of vesting installments | Installment | 5 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, Intrinsic Value | $ | $ 1,000,000 | $ 16,000,000 | $ 3,000,000 | |
Stock options exercisable, weighted average remaining contractual life | 10 months 24 days | |||
Stock options exercisable, intrinsic value | $ | $ 0 | |||
Closing stock price | $ / shares | $ 42.75 | |||
Aggregate fair value of awards at the time of vesting | $ | $ 50,000,000 | 57,000,000 | 40,000,000 | |
Total share-based compensation expense | $ | 56,000,000 | $ 87,000,000 | $ 55,000,000 | |
Total unrecognized share-based compensation expense for al share-based payment plans | $ | $ 89,000,000 | |||
Weighted average period, years | 1 year 3 months 18 days | |||
Amazon [Member] | Commercial Agreement [Member] | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Number of shares to be purchased warrants | shares | 1,747,441 | |||
Exercise price of warrants | $ / shares | $ 69.68 | |||
Estimated of fair value per warrant | $ / shares | $ 17.52 | |||
Warrants, number of vesting annual installments | Installment | 5 | |||
Warrants vest, beginning date | Jan. 15, 2020 | |||
Number of shares to be purchased warrants,vested | shares | 349,489 | |||
Number of shares to be purchased warrants, Unvested | shares | 1,397,952 | |||
Warrants vest, expiration date | Apr. 18, 2026 | |||
Non Vested Stock Awards [Member] | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
General term of a elected director, years | 5 years | |||
Vesting term, years | 1 year | |||
After 2005 [Member] | Employee Stock Option [Member] | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Term of options granted, years | 7 years | |||
Prior 2006 [Member] | Employee Stock Option [Member] | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Term of options granted, years | 15 years | |||
Director [Member] | Employee Stock Option [Member] | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Term of options granted, years | 10 years |
Stock-Based Awards - Summary of
Stock-Based Awards - Summary of Stock Option Activity (Details) - $ / shares shares in Thousands | 12 Months Ended | ||
Feb. 01, 2020 | Feb. 02, 2019 | Feb. 03, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |||
Balance at beginning of year, shares | 136 | 1,139 | 2,350 |
Exercised, shares | (46) | (1,001) | (359) |
Forfeited/expired, shares | (3) | (2) | (852) |
Balance at end of quarter, shares | 87 | 136 | 1,139 |
Balance at beginning of year, Weighted Average Exercise Price (in dollars per share) | $ 51.48 | $ 50.51 | $ 53.29 |
Exercised, Weighted Average Exercise Price (in dollars per share) | 50.88 | 50.37 | 50.94 |
Forfeited/expired, Weighted Average Exercise Price (in dollars per share) | 51.50 | 53.52 | 58 |
Balance at end of quarter, Weighted Average Exercise Price (in dollars per share) | $ 51.78 | $ 51.48 | $ 50.51 |
Stock-Based Awards - Summary _2
Stock-Based Awards - Summary of Nonvested Stock Activity (Details) - Restricted Stock [Member] - $ / shares shares in Thousands | 12 Months Ended | ||
Feb. 01, 2020 | Feb. 02, 2019 | Feb. 03, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Intrinsic Value [Roll Forward] | |||
Balance at beginning of year, shares | 2,601 | 2,811 | 2,163 |
Granted, shares | 917 | 1,086 | 1,624 |
Vested, shares | (1,004) | (1,202) | (772) |
Forfeited, shares | (202) | (94) | (204) |
Balance at end of quarter, shares | 2,312 | 2,601 | 2,811 |
Balance at beginning of year, Weighted Average Grant Date Fair Value | $ 51.90 | $ 45.60 | $ 52.75 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value | 63.57 | 63.25 | 39.69 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Weighted Average Grant Date Fair Value | 50.06 | 47.69 | 52.14 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeitures, Weighted Average Grant Date Fair Value | 57.71 | 49.08 | 59.58 |
Balance at end of quarter, Weighted Average Grant Date Fair Value | $ 56.24 | $ 51.90 | $ 45.60 |
Stock-Based Awards - Summary _3
Stock-Based Awards - Summary of Performance Share Units (Details) - Performance Share Unit Activity [Member] - $ / shares shares in Thousands | 12 Months Ended | ||
Feb. 01, 2020 | Feb. 02, 2019 | Feb. 03, 2018 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Balance at beginning of year, shares | 1,046 | 724 | 512 |
Granted, shares | 665 | 365 | 429 |
Vested, shares | (336) | (38) | (106) |
Forfeited, shares | (101) | (5) | (111) |
Balance at end of quarter, shares | 1,274 | 1,046 | 724 |
Balance at beginning of year, Weighted Average Grant Date Fair Value | $ 52.08 | $ 46.07 | $ 57.80 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value | 69.30 | 66.66 | 43.32 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Weighted Average Grant Date Fair Value | 46.87 | 78.35 | 57.58 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeitures, Weighted Average Grant Date Fair Value | 63.41 | 46.91 | 78.35 |
Balance at end of quarter, Weighted Average Grant Date Fair Value | $ 61.55 | $ 52.08 | $ 46.07 |
Quarterly Financial Informati_3
Quarterly Financial Information (Unaudited) (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Feb. 02, 2020 | Nov. 02, 2019 | Aug. 02, 2019 | May 02, 2019 | Feb. 02, 2019 | Nov. 03, 2018 | Aug. 04, 2018 | May 05, 2018 | Feb. 01, 2020 | Feb. 02, 2019 | Feb. 03, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Total revenue | $ 6,832 | $ 4,625 | $ 4,430 | $ 4,087 | $ 6,823 | $ 4,628 | $ 4,570 | $ 4,208 | $ 19,974 | $ 20,229 | $ 20,084 |
Cost of merchandise sold | 4,400 | 2,775 | 2,550 | 2,415 | 4,345 | 2,752 | 2,605 | 2,496 | 12,140 | 12,199 | 12,176 |
Selling, general and administrative | 1,742 | 1,419 | 1,269 | 1,275 | 1,694 | 1,375 | 1,272 | 1,259 | 5,705 | 5,601 | 5,501 |
(Gain) loss on extinguishment of debt | 0 | (9) | 0 | 0 | 21 | 0 | 0 | 42 | (9) | 63 | |
Impairments, store closing and other costs | 57 | 0 | 7 | 49 | 104 | 0 | 0 | 0 | 113 | 104 | |
Net income | $ 265 | $ 123 | $ 241 | $ 62 | $ 272 | $ 161 | $ 292 | $ 75 | $ 691 | $ 801 | $ 859 |
Basic shares | 154 | 156 | 159 | 161 | 162 | 164 | 165 | 165 | 157 | 164 | 167 |
Basic net income per share | $ 1.72 | $ 0.79 | $ 1.52 | $ 0.38 | $ 1.68 | $ 0.98 | $ 1.77 | $ 0.46 | $ 4.39 | $ 4.88 | $ 5.14 |
Diluted shares | 154 | 157 | 159 | 162 | 163 | 165 | 166 | 167 | 158 | 165 | 168 |
Diluted net income per share | $ 1.72 | $ 0.78 | $ 1.51 | $ 0.38 | $ 1.67 | $ 0.98 | $ 1.76 | $ 0.45 | $ 4.37 | $ 4.84 | $ 5.12 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Details) $ in Billions | Mar. 18, 2020USD ($) |
Unsecured Credit Facility [Member] | Subsequent Event [Member] | |
Subsequent Event [Line Items] | |
Proceeds from unsecured credit facility | $ 1 |