Kohl's & Dillards'

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FINANCIAL ACCOUNTING

Kohl’s Corporation and Dillard’s Inc. – Financial Statement Analysis

A.

Kohl’s Corporation and Dillard’s Inc. are in the retail industry which is a highly competitive industry. There are a high number of retail stores, department stores which compete between each other on local, regional and national level. That competitiveness is highly influencing operating results of the company.

The importance of the retail industry emphasizes the sentence below:

“An estimated two-thirds of the U.S. gross domestic product (GDP) comes from retail consumption. Therefore, store closings and openings are an indicator of how well the U.S. economy is recovering after the Great Recession in the late 2000's.”[1]

Regarding the size, Kohl’s Corporation has 929 stores in 47 states and Dillard’s Inc. has 326 stores in 29 states. They offer apparel, footwear and accessories for women, men and children, soft home products and other consumer goods. As we can see they differ in numbers of the stores and also in the approach. Kohl’s Corporation is more like discount store where Dillard’s Inc. offers more sophisticated and upscale approach, although both of the companies offer also on-line shopping on their websites.

For Kohl’s Corporation we can see their expansion below:

| | | | | | |Region |   |States |   | |Net Sales |100.0% |100.0% |100.0% | |Cost of merchandise sold |63.5% |63.6% |64.4% | |Gross margin |36.5% |36.4% |35.6% | |Operating expense: |25.6% |24.7% |25.0% | | Selling, general, administrative |22.4% |21.9% |22.2% | | Depreciation and amortization |2.7% |2.5% |2.5% | | Preopening expenses |0.4% |0.3% |0.3% | |Operating Income |11.0% |11.6% |10.5% | |Other expenses |0.4% |0.3% |0.5% | | Interest expense |0.5% |0.4% |0.5% | | Interest income |0.1% |0.2% |0.0% | |Income before income taxes |10.6% |11.4% |10.0% | |Provision for income taxes |4.0% |4.3% |3.7% | |Net income |6.6% |7.1% |6.3% |

DILLARD’S INC. COMMON – SIZED STATEMENTS OF OPERATIONS

|Dillard´s Inc | Feb 2, 2008 | Feb 3, 2007 | Jan 28, 2006 | |Net Sales |100.0% |100.0% |100.0% | |Cost of merchandise sold |64.9% |64.4% |65.2% | |Gross margin |35.1% |35.6% |34.8% | |Operating expense: |33.0% |31.2% |31.8% | | Selling, general, administrative |28.0% |26.8% |26.5% | | Depreciation and amortization |4.1% |3.9% |3.9% | | Rentals...
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