Kohl's Corp. (NYSE:KSS) Q4 2015 Earnings Conference Call - Preliminary Transcript

Feb 25, 2016 • 08:30 am ET

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Kohl's Corp. (NYSE:KSS) Q4 2015 Earnings Conference Call - Preliminary Transcript

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Presentation
Operator
Operator

Welcome to the Kohl's Q4 Year End 2015 Earnings Release Conference Call. Certain statements made on this call, including projected financial results, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Kohl's intends forward-looking terminology such as believes, expects, may, will, should, anticipates, plans or similar expressions to identify forward-looking statements. Such statements are subject to certain risks and uncertainties which could cause Kohl's actual results to differ materially from those projected in such forward-looking statements. Such risks and uncertainties include, but are not limited to, those that are described in Item 1A in Kohl's most recent Annual Report on Form 10-K and as may be supplemented from time to time in Kohl's other filings with the SEC, all of which are expressly incorporated herein by reference.

Also, please note that the replays of this recording will not be updated, so if you are listening after February 25, 2016, it is possible that the information discussed is no longer current. At this time, all the participant phone lines are in a listen-only mode. Later, we'll conduct a question-and-answer session. As a reminder, today's conference is being recorded. I would now like to turn the conference over to our host, Mr. Wes McDonald, Chief Financial Officer of Kohl's Department Stores. Please go ahead.

Executive
Wesley S. McDonald

Thank you. Good morning. With me today is Kevin Mansell, our Chairman, CEO and President. I'll start today's call by walking through our operational results. Kevin then will provide some more details on our Greatness Agenda initiatives, and then we'll open up the call to your questions. As we announced earlier this month, comp sales increased 40 basis points for the quarter. Though we were pleased to report our fifth consecutive quarter of positive comps, sales were volatile during the quarter and were below our expectations. Holiday sales, which include the weeks between Thanksgiving and Christmas, increased 4% and store traffic was 400 basis points better than industry average.

This strength, however, was substantially offset by softness in early November and in January when demand for cold weather goods was especially low. For the year, comp sales increased 70 basis points. Looking at the metrics of the comp, the components of the comp for the 40 basis point increase in the fourth quarter were as follows. Transactions per store increased 20 basis points for the quarter. Average transaction value also increased 20 basis points comprised of an average unit retail increase of 30 basis points, with a drop in units per transaction of 10 basis points. The components of the 70 basis comp increase for fiscal 2015 were as follows. Transactions per store decreased 20 basis points for the year.

Average transaction value increased 90 basis points comprised of an average unit retail increase of 130 basis points, with a drop in units per transaction of 40 basis points. From a line of business perspective, Footwear and Home were the strongest categories for both the quarter and the year. Accessories was the weakest