This summary is based on the second quarter fiscal 2007 earnings call conducted by Kohl’s Corporation (KSS: chart) on August 16, 2007.

President: Kevin Mansell
Senior EVP: Tom Kingsbury
EVP and CFO: Wesley S. McDonald
Chairman and CEO: Larry Montgomery

Key Investors Issues

- EPS were 83 cents a share compared to 69 cents a share last year.
- Net income was $269.2 million compared to $232.4 million during the year-earlier period.
- Revenue rose to $3.59 billion from $3.3 billion a year ago.

Second Quarter Highlights

Sales were approximately $3.6 billion versus $3.3 billion last year, up 8.7%.

- The company achieved a 1.3% comparable store sales increase. The comparable store sales were a result of the increase in average transaction value of 2.5%, and a reduction in transactions per store of 1.2%.
- The Mid-Atlantic and Southeast regions led the company for the quarter periods.
- From the line of business perspective, men''s and home led the company for year-to-date.
- All lines of business achieved positive comparable sale increases for the spring season.
- Credit share was approximately 42%, an increase of approximately 150% basis points over last year.

The company continues to see improvement in gross margin rate, which was 38.9% versus last year''s 37.5%, an increase of approximately 140 basis points.

The improvements were due to the continued impact of merchandise and inventory management initiatives, improved markup, the adoption of markdown optimization, and increase penetration of private and exclusive national brands.

- SG&A increased approximately 10.3%, faster than sales.
- Credit and distribution expenses leveraged.
- Store and advertising expenses did not leverage, due to the moderation of sales late in the quarter and desire to maintain a positive customer and store experience.
- Depreciation and amortization was $106 million versus last year''s $96.1 million, an increase of 10.4%.

Preopening expenses were $8.7 million versus last year''s $8.1 million.

The second quarter includes expenses related to the 95 stores to be opened in the fall season.

- Operating income was up approximately 18% over last year.
- Operating margin at 12.4% was up approximately 100 basis points over last year as the company achieved another all-time high for the second quarter.

Interest expense was $10.5 million versus last year''s $6 million, change in $4.5 million.

The increase in net interest expense is due to a decrease in interest income earned in 2007. Last year''s interest income was driven by the investment of the $1.6 billion of proceeds received from J.P. Morgan Chase as a result of a sale of a proprietary receivable.

- Income tax rate was 37.85%.
- Net income was $269.2 million, up approximately 16%.
- EPS were 83 cents per share is up 20% over last year.

The company operates 834 stores, compared to 749 stores at this time last year.

- Ending square footage at the end of the quarter was gross square footage of 74,449 and selling square footage of 63,503.
- The company has $35.6 million in investments, compared to $519.3 million last year. The decrease is the result of stock repurchases in fiscal 2006 and 2007.
- Inventory is $2.8 billion versus last year''s $2.4 billion.
- At the end of the quarter, on average store is up approximately 5% to last year.
- On fixed assets for the season, capital expenditures were approximately $1 billion.
- Accounts payable, up about 6% over last year, AP as a percent of inventory was 38.2 versus guidance of mid 30s.

Weighted average number of shares basic was 320.5 million, diluted 323.2 million.

Ending share count was 317.8 million. The company completed share repurchase program, purchasing 5.3 million shares for $373 million at an average price approximately $70 per share. Since announcing $2 billion share repurchase plan last year, the company has purchased 32.8 million shares at an average price of $60.97.