Key questions and answers from the fourth quarter fiscal 2007 earnings call conducted by Kohl’s Corp. on February 28, 2008.

Christine Augustine (Bear Stearns): Could you discuss the outlook for women’s apparel in 2008? What are you seeing with the overall product cycle?

Kevin Mansell: Overall we’ve got a positive outlook on women’s. It continues as we discussed in 2007 that the new brand launches and the lifestyle brands are performing exceptionally well so whether it’s Simply Vera, Vera Wang brand or the Elle brand, our designer brands, our Chaps brand in particular, those brands are all doing exceptionally well. The core issue in women’s continues to be the more classic customer, traditional customer, and that category is pulling those sales down in total. Women’s didn’t perform substantially different than the company for the year.

Christine Augustine (Bear Stearns): What inflationary pressures are you seeing in your cost of goods sold because of what’s happening in China?

Kevin Mansell: As we looked at our third quarter purchases overseas, primarily our year over year costs are essentially flat. You have got a couple of things going on. Clearly demand in the U.S. is lower. Secondarily, even with our conservative plans, we’re buying more and our percent business on private and exclusive is going up, so that’s helping from how more that we’re buying. The third thing is sourcing, I think being in a more vocal sourcing entity is helping a lot, so there’s a lot of growth in countries like Vietnam and India that are offsetting any price pressure we have in China.

Liz Dunn (Thomas Weisel): What’s behind the cut in square footage growth? Is it just you are looking at deals more stringently? Is there any issue related to real estate availability or is it to preserve free cash flow?

Larry Montgomery: We’re looking at the economic environment and it behooves us to be a little cautious at this time and we think 70 to 75 is a good number. We’re not changing our long range number. There is no lack of potential sites for us though.

Adrianne Shapira (Goldman Sachs): On the 70 to 75 stores opening, should we think of that as a new run rate?

Larry Montgomery: It’s too early to say it’s a new run rate. I’d like to see how the year shakes out here. It’s been consumers getting worked over a little bit. We’d like to see how that settles out. We’ve got more than enough sites and trade areas that we want to go into so it’s a matter of when we start to ramp up again.

Adrianne Shapira (Goldman Sachs): On the comp guidance intra quarter, you had mentioned that for March you expect lower than the down 3% to 5% for Q1 overall. With an early Easter, how should we be thinking about that?

Kevin Mansell: Historically what happens is that the shorter lead time going into Easter creates a shorter selling window, particularly on things that are more weather sensitive and then you lose the day itself, so the combination of those two things will impact March sales to a greater degree and we’d expect them to be worse in the quarter in total.

David Glick (Buckingham Research): Home is one of the softer areas. Can you comment on the prospects of improvement in that business and where the pockets of strength and weakness are? Are you seeing any slowdown in the accessory business or is that still an area of strength for you as you head into in the new year?

Kevin Mansell: On home, overall it was weak throughout the back half. For a lot of reasons our home business is continuing to grow. To some extent we were up against a successful period when others weren’t. But also we’re being impacted like everybody else in home.

Accessories has been our best business. Jewelry has been thriving; we had a positive year in jewelry. We had good performance in beauty as well in the overall accessory category and I would expect that would continue going into 2008. Handbags have been positive as well. The accessories throughout as a category and a business line has been positive throughout the year and was positive in the third and fourth quarter as well.

David Glick (Buckingham Research): Are you seeing any unusual costs, inflation pressure there in that business, on the hard goods side?

Larry Montgomery: In the home itself and particularly in categories like cookware, those categories are definitely against inflationary pressure, but when you look at that as a mix of our overall business, it’s a very small portion. When you look at the big picture, our pricing year over year was flat over the last year.

Dan Binder (Jefferies): The credit penetration continues to rise. Are you seeing any limitations on the ability to extend credit with default rates rising in the credit card portfolios these days or is there any real impact there that you expect in the coming year?

Wes McDonald: We continue to monitor it closely. We have seen some deterioration in approval rates in areas that have been affected by the housing bubble primarily in California, Arizona, Nevada, and Florida. Texas has also seen deterioration. We haven’t changed the parameters, we are certainly not going to open the lines; we’re also monitoring people’s credit lines extensively to make sure if they need to be downsized we are downsizing them, but I don’t expect credit to be an issue for us in 2008.

Dan Binder (Jefferies): Some retailers have more exposure than others in terms of the profit sharing agreements. Can you broadly describe what exposure you have through any profit sharing agreements with a third party?

Larry Montgomery: We have an agreement with Chase to share in the net profitability so finance charges, late fees, other ancillary revenues plus bad debt expense. The onus is on us to spend money on marketing and customer service and that’s all 100% on us but we continue to look at our net revenue and our yield percentages are all higher than we planned and certainly higher than when we ran the credit card portfolio ourselves. Our bad debt as a percent of average AR is very, very low; less than 4%.

Dana Telsey (Telsey Advisory Group): Can you provide an update on sourcing costs and initial markup and product costs in terms of what you’re seeing?