Kohls Corporation (0JRL.L) Q4 2024 Earnings Report

Kohls Corporation delivered a mixed QQ4 2024 performance. Revenue for the quarter was $5.397 billion, with net income of $48 million and diluted EPS of $0.43, underpinned by a strong EBITDA of $309 million and solid operating cash flow of $596 million. However, gross margins remained extremely compressed, with gross profit of only $32.9 million and a gross margin of roughly 0.61%, signaling a potential data integrity issue, unusual items, or structural margin erosion despite top-line growth. The quarter benefited from meaningful cash generation, culminating in free cash flow of about $497 million, while capital expenditures were modest at $99 million. The company also reduced some leverage through debt service, yet total debt remains elevated at $7.159 billion with net debt around $7.025 billion.

From a balance sheet perspective, Kohls reports total assets of $13.56 billion and total liabilities of $9.76 billion, yielding equity of $3.80 billion. Liquidity metrics are challenged: current ratio approximately 1.08, quick ratio around 0.14, and a cash ratio of about 0.043, highlighting a tight liquidity cushion despite operational cash flow strength. The cash conversion metrics show a days inventory outstanding around 49.4 days and days payables outstanding near 17.5 days, with a cash conversion cycle in the mid-50s days, signaling ongoing working capital sensitivity.

On a trailing basis, revenue rose sharply YoY by about 59.6% and QoQ by ~45.5%. Net income rose YoY by ~277.8% and QoQ by ~118.2%. Despite these improvements in profitability relative to prior periods, ROA (0.35%), ROE (1.26%), and return on capital employed (about 1.21%) remain modest by consumer cyclicals standards due to the high asset base and leverage. The enterprise value multiple versus EBITDA sits around 27.5x, while price-to-book is approximately 0.39x, suggesting a valuation that reflects perceived risk in margin sustainability and balance sheet leverage rather than earnings quality. Investors should monitor margin trajectory, deleveraging pace, and any changes to working capital policy as drivers of medium-term cash generation and equity value.