Kohl's (KSS) 17 Nov 222022 Q3 Earnings call transcript

Good morning. My name is Dennis, and I will be your conference operator today. At this time, I would like to welcome everyone to Kohl’s Corporation Third Quarter 2022 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. now Senior turn Vice would to conference I Rupe, Mark President, Instructions] like the to over [Operator Investor Relations. ahead. go Please

Thank meaning XXXX. of Kohl’s statements this on Private Securities and initiatives statements Form but and Company’s quarterly statements. Part recent Kohl’s to, on forward-looking not Act projected supplemented the of forward-looking Certain of XXXX herein cause the Reform expressly incorporated and most with should, anticipates, limited are the differ be and are Item the may filings results future X which the those terminology, report other of XA are to the call, actual statements. within as to Such Such Kohl’s quarter expressions uncertainties XX-Q by statements uncertainties, for those Form to plans intends identify risks certain on XA reference. could in Litigation risks similar annual in financial include Company’s will, you. of of XX-K all including are or may, made SEC, are materially to described such expects, time and as projected fiscal Kohl’s forward-looking report from that believes, results first in which subject in Item forward-looking time from such

undertakes to update obligation no them. relate statements Kohl’s initially the to and Forward-looking made, date

website. with that financial be as the to will filed measures. recorded. note available In addition, found necessary non-GAAP filed our investor during measures this Investor the the presentation Company’s is to and call an Form Information to will call, these Relations on reference in non-GAAP Please we SEC reconcile be this exhibit make X-K financial can

updated. this of not However, replays will be call

to past calls. that So, information obligation is if compared Kohl’s to call abbreviated discussed longer the possible call, replay is earnings undertakes listening current. no such will this be update information. as And you’re no of it Today’s a to

planning this the are I minutes. Boneparth, to the With me our Chair We approximately and the now will of Chief over Officer. last call Board; Timm, Peter XX are Independent morning Peter. Jill call turn to our Financial

Thank introductory provide then it you third to and thank review us I’ll going brief over some and you, quarter this for results. to remarks, to I’m turn morning. Mark, Jill joining our

We will then take some Q&A.

week, to become the shared our at of the to decided Levi’s, we associates, Kohl’s of As valued partner for down to CEO last Michelle all and the brand Michelle as management successor during past of contribution thank step CEO I her Gass On a nine ours. efforts to Her will behalf through and Board, brand outstanding years. and to years focus to on the building inclusive Company culture in strategically to to look forward with work like we transform is continuing introductions her future. and her benefit leader, for an Kohl’s come. the Michelle partnerships and an want Sephora collaborative

with Tom this in XXXX the interim He’s in always the is He in had We at and Many intimately and and his capacity. no integrity. regarded Kohl’s. personally Company been and operator during involved a leadership respect appreciate home. willingness greatly calls professionalism, He Board on early plans I smooth keen been place to fit working to of Milwaukee the acumen lead this has Michelle on Kingsbury to period, deal you to his days we with of for retail transition. Tom his is from since the stranger Burlington. serve perfect have board team. know from I and facilitate as and an interim management. CEO. appointed The success highly his inventory at a Tom as He’s focus have Filene’s, Tom knew great exceptional a

the him expect hit running. ground We to

the with and for the consumer business headwinds, outlook are giving along Given we prior not guidance our our for year. will recent volatility and fourth transition, the withdrawing the the macroeconomic quarter unexpected in CEO behavior, be significant

that We for fourth also position sure want to make take the the has necessary quarter actions XXXX. the to best Company the business to in the flexibility

our have to providing our to new and it February late continue call resume strong strategies We conviction is intent for in XXXX. QX on our the year fiscal in guidance

this Nominating Now, role Michael industry. company Board our and leading the well Committee Jenkins efforts oversee new and in on formed Bender, our will Margaret of spend help let as The bright an a a our with me committee as week a and current steps. Christine with opportunity from attractive and few be CEO. is Day, for to great next Tom minutes is search prospects, last Kohl’s Chair retail a I. the the ESG

excited with are to engage We candidates.

share and with always some key me are a for we has known you brands, value convenience. looking characteristics of new for Kohl’s in Let the been CEO.

proposition it’s So, understands important a omnichannel that deep go-to-market that our value and experience, has has land candidate great we expertise. brand-building

We company for for thank us permanent want a that build you’ve it teams the a invested you and we time shareholders while until process long of support time couple this stellar conclusive culture. to are This is and through looking we leader thank that a CEO have engaging and over transition will take, but for addition, and line well In interim our the how can don’t your is as remain last the continued on spirit collaborative drive period. furthering been for lot to during as a results great has underway, Tom successor know the in I years. agreed innovative has named. that with you

We position base Tom, earnings entire Board CEO committed also call create to over now to shareholder grow the the is Kohl’s to and great discuss our the to period. third quarter are value. sales, Jill turn I finding successfully and team interim supporting drive This during the next this will to management results. committed to associate

and you, Peter, good Thank morning, everyone.

thank the to too for her Michelle over partnership and started, want decade. get Before leadership I I past

results performance. quarter review Let business and our me now third

were week, last X%. sales shared down approximately we As

X.X% margin operating Our $X.XX. was was EPS diluted and

Our the which a was business high manage dampen our organization with continues given third business, to in continued facing disproportionate our challenging spending relatively quarter Persistently our apparel to during like performance home and macroeconomic in discretionary inflation goods, environment. effectively to exposure consumer expectations the the line are categories, and as pressure.

improved During store we to Digital sequentially up to in perspective, labor to last items year, continue QX having down brands. were our the quarter, shops Sephora the and saw to in more outperformed part execution From across open trade income in value-oriented due and sales X% store. a still but investment digital middle to fewer enhance down purchase private customers our trip channel per and sales of private and brands brands, best-performing the for performance of slightly Gear Lauren with sales sales. From including year, line West, XX% XX% Sonoma, a with Tek Accessories Croft & in Jumping XXXX. up our percent, Beans, nearly Conrad. to Beauty quarter third strong perspective, performance driven our our Barrow, Digital by private product mid-teens business of Nine sales. to last increased strong Sephora from top accounted of our

sales displacements. balance sales to relative partially We chain. continue percent of mid- This by see to lifts stores by jewelry, the with lower in the in-store was of driven offset Sephora to high-single-digit

intimates, We flat core to year. improve. business was which average are Our though women’s dresses excluding the outperformed to experienced momentum we juniors in maintain juniors last Company weakness working and and in

of QX to the active underperformed some relates As continued softness driven Company versus other by footwear. our categories, in active in it

especially Land’s business boots. the dress underperformed achieved to line and And outdoor our Our footwear, and pleased in growth with home in children’s with Eddie average. growth from business, we casual continues outperform Bauer men’s End. are in lastly, performed Company In the when

Now was basis-point ongoing XX.X%, let a which which in XXX XXX driven as points, elevated shrink QX by product year. an was well to the increase cost me freight margin basis gross costs, decline of down from margin inflation, the as points income The last turn headwind levels. pressured XX rest by statement. basis was

reduced Our last wage to holiday-based And diluted million to quarter from year’s decreased Interest Sephora-related the lapping billion, than income of as through to some from continued million for $XX to lease pricing optimization million higher to able due million. expense of borrowings amendments $X.XX. and Sephora $XX the million $X.X than continued headwinds. was this was of capital Depreciation expense year due lower And of disciplined year benefiting roll was X.X% SG&A we lack spend. incentives last margin per last the $XXX management, our Net earnings retention $X year, expenses. primarily $XX reported, out strategies. share offset expenses expense technology increased previously was and promotional benefit were and

the sheet Turning flow. balance cash to and

flat. was increase. third at When inventory our quarter-end Kohl’s last quarter XX% to Our increased of percentage beauty with points year to compared the XXXX, Sephora of investments inventory contributing X at

We in QX, cash stores pack-and-hold new November, the which new expect on by stores. $XXX of mainly opened and in remaining early transit environment. responsive by Sephora During relocated in flow to feel further we about and We agile to and reduce year-end, third the X driven Capital X sales million, another quarter. continue million to were progress for $XXX are set demand making and was we expenditures quarter the the occurred X the good improvement inventory merchandise stores. XXXX, Operating in the floor and normalized.

we $X.XX in dividends to During per shareholders. or share $XX the quarter, million paid

December of X, quarterly repurchase From received million In share the In $X.XX the dividend another recognize QX. price to payable XX.X of share X.X disclosed the accelerated on we share. per million November on in XXst. million Subsequent resulted we addition, $XXX shares total, our remaining to XX.X an as completed previously approximately in Board QX of an average end we quarter, declared shareholders per cash $XX accounting perspective, and which we’ll program. recognized in the shares million shares,

an capital credit Starting me allocation let our priorities. our and with Now, capital structure provide first facility. revolving update on

the by seasonal million. program. As of to driven the At execute repurchase our million $XXX the quarter, ahead revolver share our $XXX revolver holiday accelerated third expected, usage we during build quarter, balance third the was inventory of and the increased end outstanding of our

our borrowings key parts as season. of through to selling Importantly, the repay we expect move fully early December, revolver in the holiday we

times. communicated our that balance have long-term rating, maintain of We supported X.X is by and prudent investment-grade objective to our management, leverage a target consistently sheet

on Our objectives philosophy changed front. this not have and

plan bond balance historical XXXX. in our to We the will Looking dividend, to followed totaling sheet pay our our forward, its strength. million down maturities $XXX allocation by two actions capital returning prioritize

advisory our strengthened on not the we robust a $XXX opportunities and engagements real recently private estate. This where fully our leverage real participants process used any million additional real assess industry XXXX. owned investors forward our are estate estate is firms, engaged repurchasing robust firms. X.X recently of dozens We times. planning from and of estate as integrated institutional brokerage with a specialty sheet towards target path included completed service firms, to pull shares investment We specialty large, for asset and on potential ASR large real until a monetization estate balance And we real with completed equity

market our of regularly with flexibility. a sheet continue environment, the that focus maximize and the it’s with value, on optimize portfolio existing course our Given process health estate long-term stay to volatility profitability we have balance the drive rate concluded and current best financial asset and evaluating real to and maintaining

We will not take advantage this transformative as but favorable continue a they in at opportunities engage to time. sales-leaseback arise, transaction of

comments Let our on me a outlook. few share forward

our to and how featuring through private programs promotional Kohl’s holiday our iconic in amplifying value our value brand Cash key more is and events. Rewards into customers campaign prominently holiday, messaging we knowing leaning our important across this brands as as Kohl’s our well year, are by marketing For

pet, including include apparel and and Our special gifting key focus greater as expanded in an active online messaging, increased again our exclusivity Sephora holiday both and newness at product our stores Kohl’s now this once look with Gifting we to an in-store, toys, over holiday support in is occasion cozy forward XXX our important such outfitting and theme customers tech shops. assortment, season, serving areas dresses. and and

opening as remain remarks, financial his our committed to in our outlook, we and to relates stated Peter in it strategy. confident As

transition. sales quarter recent the trends given time. and the significant to we headwinds, guidance do It at the with are this prudent macroeconomic along thing However, our business, earnings fourth providing CEO not is unexpected the in unpredictable

want for the also sure make flexibility to we XXXX. position take that necessary actions best We the have to business to the

few on a comments weeks, to commentary. has become recent and unpredictable financial recent In share forecast. me environment more the select trends Let qualitative

customers sales were as this holiday September, into shopping start fairly softness when Following October XXXX stable compared late November in inventory. and a August with as trends concerned of to to compared decelerated is a year. last to function We in about primarily of continuing later believe scarcity

fronts that are taking actions challenging multiple best in short to that Given our we’re the term, positioned. across expectation will continue ensure environment we the

commitments We opportunities savings conservatively, are expenditures. capital inventory planning and expense executing reducing

key this do to growth while future will We in our initiatives. continuing invest

first and XXX XXX additional shops, with at benefit bringing day building Kohl’s and is I Our season incredibly we on to time our elevated support to environment In sales. both partnership our Sephora customers a and special remains questions billion we’ll extremely open are $X I’m both XXX in The strong, Sephora total holiday are extend special the as I at holiday smaller experience a and all XXXX, your so our well happy value-driven a want greatly with personally I for Kohl’s to at your Peter focused customers admire and to I to and remaining on for from this associates. that, With closing, dedication to Sephora every our our to of stores. reasons, and make progress putting take our more each the to of business. time. your more many see as strategies. for thank footprint promotional developing concept excited value store you In Kohl’s. commitment

question your go Mark from first line of [Operator Please Altschwager Baird. Instructions] the is And with ahead.

more Peter, for? key an is the Are in search, to an has interim Company the is the looking looking role scenario on attributes you current execute for for individual things on shake up Board continues First, perhaps Tom outlined bit? could a can looking the the a with And than who you the basis? respect finally, or expand where strategy there CEO to

Yes. morning. good Thanks, Mark, and

your the strategy aligned right current we’ve to regard fully the Tom As to the first are question, upon elaborate, and just is team that Board that management one. embarked and the

for who who’s What strategy to can brand somebody sales, a operator, not on. very basic drive change behind strategy. we is proposition we’ve the for said, embarked a the CEO earnings Kohl’s drive looking the and we’re coming per share somebody looking So, who as in I strong somebody the that are understands who value can and tenets

is jobs So, to this what we search us that in long amongst is this top lead the run firm going retail that who the somebody business is in and confident are to time. for grade a can to

CEO that As it relates to be find will Tom’s until committed we us ongoing he involvement, one. Tom has interim to

date along at background that We end his assignment interim. in be this of better -- point that So way. time clear at for while there’s couldn’t a and is no asking it’s very Kohl’s this the his leader his given support

in and then on the QX a the sense rate some on know And And October detail, into on run just to you what withdraw of quarter kind and give get gross decision try the lot would Jill, costs like guide, and takes of don’t the you in November, early to provide puts more shrink. late I a helpful QX. to out us you can as and called color given but the we of be the of exiting is any early margin, and monthly volatility freight

factors Just what relative see QX any thoughts Thank look on what like on you to you. today? those QX in based

Sure. Mark. Good morning,

I think saw we stable late It that call, the of in for we in we October and August sales really was mentioned sales, a saw softness. part September.

I What moderately We in into that quarter. You underperformed actually can November. would softness continue saw better. it’s is the read it say

an we see did So that reverting seeing mentioned, pre-pandemic we period some the to more we last of to to year, we that, don’t today. in scarcity which back shopper environment, shopping why partially because or Like the XXXX are just lot acceleration improvement. are due of that see we -- given a us visibility really guidance led to withdraw the and the to of looking macro we inventory. have withdraw uncertainty the But wanted into volatility

we margin, being freight we start had in that all terms We headwind as lot of a year. QX. knew a a about In would talked lapping headwind

back come inflation. called saw, what is But moderate. cost actually will that that QX, So, as you does out, in we

So, cost elevates. actually freight will moderate, where inflation

see ongoing. a just really then we’ll shrink pressure And So, similar there. is

that think heard macro. about I you’ve more

us. a as shrink for see to headwind continued we’ve So,

to we priority associates first We’re of keeping try with, course, of us and manage customers that safe lot through from go our doing a the foremost as perspective. that and to of our things

strategy that’s a think confidence can the we we’re conviction kind in lack I the color fourth not you of we But the that don’t move the quarter. I I just as the would So, overall, have employing. we it’s give and into of visibility say that and uncertainty have,

question next from with Your is of Drbul line the Bob Guggenheim.

Mark’s you to you is the range? I I on that a sort can framework or you wider think business be up you this to us can guidance Any both. want how think just the Peter a to don’t follow have Jill into then, pretty about would talk QX, decision do if want position or I but know follow-up. ‘XX, versus questions. about withdraw I as even actually But of the give And just helpful. maybe around ‘XX? to that But,

I’ll maybe Jill. to Bob, it toss Yes. over start and

First to talk nice to of and morning you. all good

know, that difficult period this Jill, as Board as the has as I you been visibility been a fourth quarter of doing remember. any I our for I’ve has many long as as So, time, could members say the would and have

hand, you and were inventory. customers so result, of lot early an a conviction. So we’ve you these had numbers Everybody, a early situation is had had the big nobody the said, you what to people all in as quarter, a have, as last on inclined one where had buy so year

course, people Of problems, that and had issues the quarter, as end had had the inventory of by well. we

a was Was weather? consumer has this saw behavior? pronounced anybody knows. highly lot anticipating probably calendar. slowdown And everybody a over, factors. going into Was that of elections? those in of customers, that think promotional we’re that the we October all Now, a don’t I November It’s combination inventory, really obviously, you then, X flip the

minds, obviously that judgment an call, which then CEO is a frankly our You with in unexpected call. combine XX-XX and our transition

it give to fourth quarter the and promotional drive value sales environment. strategy, that very important during execute a to to is the the Tom team judgment was our and Our in latitude very basic on which

competitors, heard there. I with what consistent from saying everybody other You’ve out it’s is think

happen. believes that I think exactly to out if Jill, I anybody knows I know, to don’t will going think come add everybody sure but don’t today that? there for have you to anything Christmas what’s

No, sentiment. I echo would

unpredictability we’ve about weeks. it’s the the I not over and It’s and the think the confident really volatility last strategy. in we’re trends several the that not seen that

we a As It’s holiday to enter focused into very we the core know Kohl’s. be season, going tenet for value. on it’s

affords this can make So market sure really opportunity compete, the us after the set we to well. we’re go up that share,

XXX shops. have We Sephora

a We leaning across outdoor the have store, newness of including successful like dress. smart lot home, and pet, areas into

the strategy. in So, we have confidence

I the mentioned. much the had environment it’s more Peter macro and think of about that uncertainty unpredictability the

Got just a it. Jill, question. And have I follow-up -- I

So, how be performing I you really sort to enough will think if is comments chatter was creating called brand, was Conrad the a to one be that how or brands Lauren out it women’s of one products I Lauren important of the is the you lot seems any carry to brand, that leggings. wondering Conrad in mid-rise the of if around quarter? that And in that’s fourth stock, the just LC of

for is really we call am think out us pair of resonating Lauren our and everyone I a customer. successful a and Conrad who great did we with Lauren, as love knows, Well, I been out personally legging. called brand have a doesn’t shopper, -- has

success well, quarter. of doing flat in it’s -- the women’s core we I of the indicative just talked was on her really women, brand just but So about general. really business And are think the leggings the of

take So, we we’re issues when about, some we’ve have out juniors, there. working talked you through which the of

we Lauren feel And with great how really brand. overall, So, a is happy women’s just performing. is

you And actually Conrad the know the about with Lauren I’m leggings. happy really happy that We’re partnership.

marketing special our apparently, So broad is reaching.

you. Thank

with Gaby line Carbone ahead. Your go Bank. next is question of from the Deutsche Please

aren’t at guidance. brings with So kind XXXX still you would understand promotional on if end you be I of back at the the line the which maybe last year, then high-teens quarter, kind it. in levels. on And of front. you that’s of inventory, you’re it providing likely how mentioned thinking Curious about just

kind maybe holiday better and curious Just you how in about the your be you’re XXXX. going of is of what than activity saw thinking still to

Sure.

I right to inventory, is it of we actually terms inventory where be. In expect think

it I of going large we think make those weren’t wanted we talked to sure a fresh to we We did. we to protect were flowing which we improvement going -- we knew wouldn’t receipts, we but were wanted be improvement, make because holiday. amount

So, come to a lot the of we flowed that receipts. benefit holiday after would us

it’s on focused inventory. talking well. very a of Tom, still I just with his focus know We’re as key

ourselves So and we flexibility with the year. you to successful will are see that make enter clean in be sure to we that ready XXXX positioning that

focus perspective, that So, I’m down. into investments I inventory ‘XX fact we’re we’re to bring would to going that say beauty. from to an and continue with flat even we’re with the happy making the

right where is expected it the to be. progress So, we

core mean, and In I is And value, of a promotional. of about in Peter values us there’s unique. know the convenience we be it’s and lot he this holiday always We the call, of still Kohl’s When of going business holiday. talked for period, to terms brands. started front know holiday

lean And really to so, that. into going we’re

Cash. We have the iconic Kohl’s

Rewards We program. have Kohl’s our

think sure our that business of another going through I value us We’re going is Kohl’s to make to and to actions competitive. offering that portion as to the that’s drive give we’re season market what took. we’re make that really And holiday share. compete This the the use well getting we sure credit and flexibility really

go ahead. Please the Our with Oliver next question comes of Chen from line Cowen.

Jill, nice on and Lauren and well. to Hi Conrad nice job talk as you, Peter to

savings, there’s just consumer the conscious. more price love is think becoming look what’s much still with more promotional which unemployment you we your would as and currents this the because low consumer these ahead views And might intensity? general some uncertain environment, with in As do but happening categories cross have on

about one. we’re and We definitely start start customers now with it you seeing the Well, it. customers income and income call the I’ll in this talked I because again, lower on our Yes. higher are consumer QX mentioned growing. on can as

We’re quarter really that move. customer income. as as middle And into who customer, well that squeeze is core which we continues that is and seeing our the this watch

is So, important. value know we

thought the We they and Oliver in how migrated voted in They’ve QX quarter. proprietary and also both QX our brands. to

for they’ve outperformed brands So, last national time quarters, is the that time. that two we’ve which in long first the a seen really

to So, lean we an this even in about that but definitely value that. newness, know Sephora into we is win going holiday have season, we We to our and to shops, we need a lot elevate know opportunity gifting. talked

So that doing at have that. we’ll start even going we’re $XX. to be gifts But

we’re the store. into leaning little income fulfilling customer and we’re a lower bit sure in make really needs their that how So, we can the fact across that bringing

than to terms I that have the promotional I promotional who that’s In it’s particular more going is, I there’s holiday. just prepared know of to category to intensity is if be think want a mean, and Kohl’s fundamental we’re don’t definitely any know this of intensity, widespread. going compete you others. to I core

is Omar Evercore Please go question next line Your from of with Saad ahead. Partners. the

you in, how you. shopping inventory you occasion-driven recovery comfortable you’re positioned could like behaviors versus at? COVID some categories consumers as on winning Thank they’re you’re or the where return shopping of to are especially from positioning, their well standpoint dive and and pre-pandemic the of kind Do an categories? inventory deeper about you feel of do Jill, kind a balance, feel you categories

Sure.

year, think called we on inventory as I inventory. from were last out, an low perspective, we

I we first foremost So, was build in needed back places really back. two think women’s. and the that And to we’ve big built

did took of out bring underperforming it that chain over to go year, women’s. trying of We So, back we’re last and exiting was lot the tough transition if newness. do to we disruption. brands then back supply given we a time, in a And in

So, were under-inventoried. definitely we

an I perspective for positioned think we from inventory feel women’s. well

participated but We’re the specifically haven’t that know for we has seeing and dresses dress more important. it, We in are that us, always new dresses with resonate been casual right? customer, category a

funded into for it’s we definitely that performing So, been inventory, and us.

the into to around You’ll holiday dressing occasional see even well. as going holiday more really that have dresses we’re period,

home, but to moving perspective. So, feel necessarily from that good well we’re Black Friday actually haven’t we in, come drivers for into we In things smart that TVs, some to deal know of our the and people positioned are home, big participated electronics store. back

newness they’re then bringing that great. think I in, outdoor electronics is also business. in we’re And our expanding the So

going things so, tents and see to you’re and And like coolers seating.

So that’s that build side, had a over really on But that quarter. off is to place last strength you’ve past we’ve the then, think trending the going we’re is softness. seen I apparel active And the still well.

of have those So and the much to are Tek our going more product, store you’re the great to we’re of with to to the important value more that of a going FLX going the going we see Gear because be holiday orientation front array on see going that season. move products, you’re that Sephora, really to which of see but to during

have we moves we the as from holiday, expect So then to strong that have inventory, feel we we I we the we will progress I to we I with any content be, feel good make position. think to as into made where like enter and across we head XXXX that look is need the a to, it make flexible sure

in any Got levers on on going then And the side what’s you business? any thoughts going the active again? that maybe quick And pull footwear it. get to can Thank you. of

Yes.

start When supply we happen sells enough just get do should don’t seeing flow newness more chain getting in. just it of a the about I in newness, the it’s my have think right and We well. understanding, we QX. now, it. From

back into we’ll about business as I and would have We I’m spring excited the is really dress happening business pushing we that great the say side as statement is start well, move So coming a But we ‘XX, footwear, we is which what positive actually expect good of a through. comps the there, ran boot positive a Omar, into period. holiday in zone.

side dress bit, lag about think active the a little will I So, of but footwear the really business. excited

Jefferies. Your of next the Ashley with question from Helgans line is

It’s Blake ask promotions to the impact on wanted margins. I to on One Ashley. just questions. and two Good the morning. for gross

is and I directional know on then in So, thinking headwind bit if freight cost be about don’t you impact I think from inflation. the promotions. product maybe margin read how we promotions? QX then, in should a any more mentioned gross a QX little could or And you hone

think, I strategy and we optimizing and pricing had a have around as know, that. really our you promotion

quarter, our is had as these called clear us a as to actually to as inventory What third through those really offset more we optimizing we’re helping when well that offset of So, much be benefit margin effective to headwinds in promotions the actually out I’d that. some as helping say well. to some we

more eliminating of the to was for lot So math. more because had offers, offers, targeted stackability, customer much do confusing which they personalized a much

that So, the offers their customer to behavior. making drive we’re putting sure really that the are in meaningful to

that we season Kohl’s being is that strategy then can extra specifically competitive holiday then offers. to from Pricing that is where course, we’re make get and So benefit underlying all still this really being and important Cash during employed. of sure being

we in muscle We years to Kohl’s move something know the in we as It’s over seen today years haven’t into think out. has how how know lean we and that be As And promotional. new is holiday, that past. to I thrived agility the promotional. you it’s always in a that have

from on make quickly, we’re a more to going what to much moves those consumer able perspective. be seeing So, we’re dependent

where competitive, in move and product moving able consumer to a to more targeted much to we’re promote see be manner is behavior. the So, promote to promote

of up a So, that in quarter. plays set I fourth this feel of Kohl’s, and to advantage strength the actually to that take we’re

you’ve plus. Sephora, had hear. just year some That’s about on then And you. great wondering, stores for of a or year Thank now also those to

a So more stores And how comment are Thank little comping. average? versus could expect to up under if just inflation your wondering on that how chain you. then, hold you customer broadly those you do

we’re high-single balance up Sure. to performance still say digits, What so I seeing is, great from would mid- of the the Sephora. They’re outperforming one, chain.

the but we of it The month stores good. quarter count one obviously just is for So positive. feel

feel we they comping. that So, are great

sales. seeing in we’re I think that beauty

It’s people back. replenish traffic it. said is beauty this and need we’re makeup driver to for They lipstick during why that for a skin as this seeing they see they cosmetics need. care. times, us. or think that I a is inflationary their Even We’ve across come need always

that we business is thing us. continue Like gifting the our I mentioned So, for to during drive like period. on the this year, call, a that something outperformed we feel holiday was definitely last can know

going a you’re much gifting see year. to assortment this more expanded So,

to do accountability some all going to and more a that partnership very price elevated with the inflationary Sephora. have much with and of And really environment the we’re good marketing support take We’re this points in. we’re to going into uncertainty value

hitting we So, comp period. I strategy think we feel for as great year, their start stores XXX with it really feel up set great and We the holiday as first the those unfolds. well feel

question of next Gordon from Chuck Your ahead. line is the go Grom Haskett. Please with

was I buckets in Good Sephora, transit, wondering different you to Jill. quarter, nice on this go that inventory, see around. out us, core maybe across the could those frame Last a really pack-and-hold. you buckets, for provided guys progress on if slide packing

pack-and-hold on lot Chuck. Yes, made is the it floor. on the Honestly, so, easier a us,

is literally into that a to didn’t difference we So, last not Obviously, it year. inventory. buy

So, in-transits call, mentioned third our then the back of that on line. And quarter. came we really in in went kind just away

had That I are in disruption, think in the extra wasn’t There’s the saw that across in shipping lanes. of pretty ports because needed supply you capacity the time. -- clear. a chain we written lot

that. So, to really we were able normalize

we one So, XXX to beauty. we about it is call The out did thing basis call have didn’t for points out.

we investment the have that we as So, open, into stores now made XXX inventory.

was reconciling that only item. the So,

trying really All flat but to we through what at. we mentioned, more even come, progress as But beauty simplify feel going do the looking progress, with good so QX. right. we’re to to XXXX, So

I think that was our last question.

So, want you a wonderful on thank for I to just you, season. everyone, the wish and holiday call today, listening

conference Thank you third Corporation This does XXXX call. call. today’s joining for conclude quarter Kohl’s all earnings

You may now disconnect.