Kohl's Corp KSS
Q2 2011 Earnings Call Transcript

Transcript Call Date 08/11/2011

Operator: Good morning. My name is Ashley, and I will be your conference operator today. At this time, I would like to welcome everyone to the Kohl's Quarter Two 2011 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.

Certain statements made on this call including projected financial results on statements regarding the Company's intent to receive its prior financial reports, the nature of the estimated adjustments of the restated financial reports, and the expected timing of filing the restated financial reports, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

The Company intends forward-looking terminology such as believes, expects, may, will, should, anticipate, plans, or similar expressions to identify forward-looking statements. Such statements are subject to certain risks and uncertainties, which could cause the Company's actual results to differ materially from those anticipated by the forward-looking statements. These risks and uncertainties include but are not limited to the risk that additional information may arise during the course of the Company's lease accounting review that would require the Company to make additional adjustments to our financial reports, the time and effort required to complete restatement of the financial reports, as well as other risks described more fully in Item 1A and the Company’s Annual Report on Form 10-K, which is expressly incorporated herein by reference, and other factors as may periodically be described in the Company’s filings with the SEC.

Also, please note that replays of this call will be available for 30 days, but this recording will not be updated. So if you are listening after August 11th, it is possible that the information discussed is no longer current. Unless specifically noted, the historical results and the guidance that the Company is about to discuss do not include any adjustments that may result from the lease accounting corrections that the Company disclosed in its earnings release and related 8-K earlier today. Thank you.

I will now turn the conference over to Wes McDonald, Senior Executive Vice President and Chief Financial Officer.

Wes McDonald - SEVP and CFO: Thank you. With me today is Kevin Mansell, Chairman, CEO and President. I will take us through the financial performance, and then Kevin will make some remarks regarding our merchandising, marketing, inventory management initiatives, and then I’ll close with our earnings guidance.

Total sales for the second quarter were $4.2 billion this year, an increase of 3.6% over the second quarter of last year. Comparable store sales for the quarter increased 1.9%, driven by a 1.6% increase in average transaction value. The increase in average transaction value reflects the net impact of a 6.1% increase in average unit retail, and a 4.5% decrease in units per transaction.

The number of transactions per store is up slightly at 0.3%. Year-to-date, sales increased 3.4% to $8.4 billion, and comparable stores sales increased 1.6%. Average unit retail increased 4.6% and was only partially offset by a 3.7% drop in units per transaction. The average transaction value rose 0.9%. We also achieved a 0.7 increase in number of transactions per store. Kevin will provide more color on our sales by region and line of business in a few minutes.

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