BA paper outline

KOHL’S CORPORATIONS

INTERNAL PERFORMANCE

Kohl’s Corporation (NYSE: KSS) is an American based department store chain headquartered in Milwaukee suburb of Menomonee Falls, Wisconsin. The company entered in S&P 500 list in the year 1998 and in 2010 it also got a place in Fortune 500. As per the latest annual report, the company 1,158 well established stores and is located in 49 states. Kohl’s Corporation become the leader in the department store chain in the year February 2013 after surpassing its main competitor J C Penny. The product portfolio of the company consists of footwear, clothing, bedding, jewellery, furniture, beauty products, house wares and electronics. The company manages a large team of personnel with 137,000 people working for them out of which 31,000 are full-time associates and the balance is part time associates. (Kohl's Corporation, 2014)

COMPANY’S STATERGY, MISSION, VISION, VALUES AND STAKEHODLERS

The main mission of the company is to provide create a niche market for the products offered by it and also to enhance the customers shopping experience at their departmental store. The vision of the company is to become the largest departmental store in the world and establish itself as a global player. In order to achieve its mission as well as visions the company follows the strategy of increasing the per store transactions. It believes that by increasing the per store transaction, the company can be profitable and establish itself as a global player. (Farfan, 2014)

COMPANY’S FINANCIALS

	Income Statement (In Millions)
	2011	2012	2013
Net sales	18,804	19,279	19,031
% Growth		2.53%	-1.29%
Gross margin	7,179	6,990	6,944
% Growth		-2.63%	-0.66%
Operating income	2,158	1,840	1,742
% Growth		-14.74%	-5.33%
Income before income taxes	1,859	1,511	1,404
% Growth		-18.72%	-7.08%
Net income	1,167	936	889
% Growth		-19.79%	-5.02%

The analysis of the income statement reveals that there has been a drop in net sales as well operating income and net income of the company in the last 2 years. (Annual Report, 2013)

DEBT LEVELS

The long term debt levels of the company as at 2nd Feb2013 was $2,492million and was $2,792million as at February 1st 2014.

HISTORICAL STOCK PRICES

The stocks of the company are traded on NYSE since the year May 19, 1992. The table represents the stock price of the company over a period of last 2 years.

Historical Prices	2013	2012
	High	Low	Dividend	High	Low	Dividend
Fourth Quarter	58.47	49.97	0.35	55.11	41.81	0.32
Third Quarter	57.04	49.84	0.35	53.77	49.72	0.32
Second Quarter	54.16	47.00	0.35	51.25	43.13	0.32
First Quarter	49.32	45.21	0.35	52.19	45.56	0.32

INDUSTRY PERSPECTIVE

The company operates in Life Style and retail sector. The industry to which the company belongs is departmental stores and the industry is affected the consumers income as well as the preference of the consumers. Where the standard of living improves, this industry gets a boost and the performance of the industry improves.

COMPETITORS

· J C Penney Corporation Inc (Privately held)

· Target Corporation

· The TJX Companies, Inc

The company faces tough competition from of the three companies. (Yahoo Finance, 2014)

	Kohl's Corporation	JC Penney	Target Corp	The TJX	Industry
Market Cap:	11.57B	N/A	37.43B	41.85B	5.20B
Employees:	31,000	11,60,001	3,66,000	1,91,000	18.70K
Qtrly Rev Growth (yoy):	-0.01	N/A	0.02	0.07	0
Revenue (ttm):	18.86B	12.98B1	73.23B	28.20B	3.78B
Gross Margin (ttm):	0.37	N/A	0.29	0.28	0.33
EBITDA (ttm):	2.59B	N/A	5.69B	4.01B	221.33M
Operating Margin (ttm):	0.09	N/A	0.05	0.12	0.05
Net Income (ttm):	868.00M	N/A	1.51B	2.18B	N/A
EPS (ttm):	4.1	N/A	2.37	3.04	0.13
P/E (ttm):	13.78	N/A	24.95	19.9	19.5
PEG (5 yr expected):	2.3	N/A	1.55	1.68	1.03
P/S (ttm):	0.61	N/A	0.51	1.47	1.47

SWOT Analysis

Strengths	Weakness	Opportunities	Threats
The company has high revenue and financial position	There is a constant change in the market share due to the change in preference of the consumers.	Increase in disposable income with boost the sectors performance as well as the performance of the company.	The increase in prices of raw materials leads to decrease in profitability.
It is listed on Fortune 500	The company has limited global presence because there are many economies which are still developing and emerging.	The company can acquire small retail stores as it the largest departmental store is US.	Unfavourable government policies can lead to down fall of the industry as well the company also.
Kohl's stores feature nationally recognized brand-name merchandise, exclusive labels, and private-branded goods		It has the opportunity to expand in foreign markets and tap the customers from there.	Requires huge capital for rapid expansion of the company.

(KOHLS, 2014)

The SWOT analysis helps in understanding the core areas where the company can improve its performance. It also helps in identifying the factors which can have a negative impact on the performance of the company. As the factors can be identified, the company can take steps to correct the variances that arise and thus improve the profitability of the company.

ENVIRONMENTAL FACTORS

There are several external factors which has an impact on the performance of the company. The new regulations by the government if in favour of the industry help to boost the performance of the industry. As the company is the leader in the industry, any favourable change by the government in terms of policies and regulations will help the company’s performance to increase.

Also the prices of the raw materials can affect the performance of the company. Where there is an increase in the prices of the raw materials, the cost of goods sold by the company increase and there is a reduction in the operating profit of the company. However with the rapid changes in the technology over the last few years in the industry has helped the company to improve its cost efficiency and control its cost better.

SUMMARY

Conducting a research analysis of the company involves not only analysing the quantitative data but also the qualitative factors which has an effect on the performance of the company. For the purpose of this project I undertook the research analysis of Kohl’s Corporation. While conducting the analysis I learnt that the company is a leader in departmental store chain business and it has operations in around 49 states. In other words the company is widely expanded and has a huge geographical extension. While conducting the analysis of its financial statements I found that the net income of the company has decreased in the last few years. In the last fiscal year 2013, there was a drop in the sales of the company which simultaneously affected the margins of the company. Also there was an increase in the cost of merchandise sold over the last few years because of which the margins of the company have been adversely affected.

SWOT Analysis- I analysed that the as the company is the leader in the sector in which it operates, any boost in the economy which in turn improves the standard of living and disposable income of the consumers will have a direct positive impact on the company. It will help the company to improve its sales as well as profit margins. Also as the company has products which are specially suited for the domestic consumers, the improvement in economic condition of the country will surely benefit the company.

During the analysis I learnt that the company belongs to retail sector which is highly competitive and any change in the preference of the customers from the company’s product to any other company will surely affect the business of the company. Also the prices of raw material have a major impact on the profitability of the company. The increase in the cost of merchandise will surely have a negative impact on the company. The company should look in for suppliers who provide the raw materials at the lowest cost.

Internal and External Factors- I learnt that there are some internal factors which has an impact on the business. The management of the company should be proactive to gauge the fluctuation in the prices of raw materials and accordingly should develop strategies to mitigate the adverse impact of the rise in raw material cost. I also learnt that external factors such as interest rates and foreign exchange currency affect the performance of the company. As these factors are not in the hands of the company, the company can still develop strategies to hedge themselves from the potential fluctuation of currency and interest rates.

BIBLOGRAPHY

Bibliography (2013). Annual Report. Farfan, B. (2014, October Thursday). Company Mission Statements - Complete List of World’s Largest Retail Missions. Retrieved October Thursday, 2014, from Company Mission Statements - Complete List of World’s Largest Retail Missions: http://retailindustry.about.com/od/retailbestpractices/ig/Company-Mission-Statements/Kohl-s-Stores-Mission-Statement.htm KOHLS. (2014, October Thursday). Retrieved October Thursday, 2014, from KOHLS: http://www.mbaskool.com/brandguide/lifestyle-and-retail/4932-kohls.html Kohl's Corporation. (2014, October Thursday). Retrieved October Thursday, 2014, from Kohl's Corporation: http://www.kohlscorporation.com/AboutKohls/AboutKohls01.htm Yahoo Finance. (2014, October Thursday). Retrieved October Thursday, 2014, from Yahoo Finance: https://finance.yahoo.com/q/co?s=KSS+Competitors