Kohl's 2001 Annual Report Download - page 3

Our performance in 2001 once again demonstrates the
strength of the Kohl’s concept of delivering brands,
value and convenience to our customers. In a very difficult
retail environment, our Associates achieved another
year of outstanding results.
As we approach our ten-year anniversary as a public
company, we take tremendous pride in our past
achievements and look forward to building on this
strong foundation in the years ahead. The small
Midwestern department store chain that was started in
1962 and went public in 1992 is today one of the
nation’s most successful retailers, expanding in new
markets from coast to coast. Over the last ten years, we
have established a record of strong financial performance
built on the consistent execution of our concept. The
credit for our success goes to our nearly 60,000
Associates, whose spirit and commitment enable Kohl’s
to reach higher and accomplish more every year.
In this report, we will focus on the strategies that have
made us successful over the past ten years and the many
growth opportunities ahead.
Successful Growth
Kohl’s has grown from 76 stores at the time of
our Initial Public Offering (IPO) in 1992 to 382 stores
at the end of fiscal 2001. During this period, net sales
have increased nearly seven-fold, from $1.1 billion in
1992 to $7.5 billion in 2001. Diluted earnings per
share have increased 13-fold, to $1.45 in 2001 from
$0.11 in 1992. Cumulatively, a $1,000 investment in
Kohl’s initial public offering in 1992 would have grown
to over $37,000 at the end of fiscal 2001.
While every year has its achievements and challenges,
our 2001 performance is especially significant given the
difficult retail environment. In a troublesome year for
many retailers, we maintained our focus on increasing
market share and bottom-line profits. Net sales were up
21.7% in 2001, and net income rose 33.2%, both far
exceeding our goal of a 20% increase each year. While
most of our direct competitors reported declines in
same-store sales for 2001, ours increased 6.8%.
Our goal over the last ten years has been to increase
square footage approximately 20% per year. We
continued this in 2001, and plan to maintain this
growth rate as we expand across the country. Our
expansion each year continues to be a blend of entering
new markets and adding new stores in existing markets.
We opened 62 stores in 2001, including successful
entries into the new markets of Atlanta, Austin,
Oklahoma City and El Paso. We plan to open
approximately 70 stores in 2002, including major
entries into Boston, Houston and Nashville. In 2003,
we will expand westward with entries into Los Angeles,
Phoenix and Las Vegas.
Consistent Execution
Kohl’s success is built on replicating our successful
model over-and-over in each new region and new market
we enter. Our approach is disciplined, but not static.
T o facilitate our growth, we are continually refining
and enhancing all aspects of the business. As we grew
beyond our Midwestern base, we developed a regional
management structure to oversee each geographic area.
We have also added corporate functions to better support
our geographic growth. We now have a merchandise
support group that provides feedback to the merchants
on structuring merchandise assortments for a variety of
regions with different climates.
Fro m left: Larry Mo ntgo mery,
Arlene Meier and Kevin Mansell.
1