KSS – Market expectations are for Uniform ROA to stabilize near historical lows, but management is confident about their portfolio, customers, and the holidays

• Kohl’s Corporation (KSS:USA) currently trades at a historical high relative to UAFRS-based (Uniform) earnings, with a 39.2x Uniform P/E. At these levels, the market is pricing in expectations for profitability to stabilize near historical lows, but management is confident about their portfolio, servicing customers, and the holiday season
• Specifically, management is confident in their ability to increase cash balances, keep customers safe, and adapt their marketing and merchandising strategy. In addition, they are confident their portfolio differentiates them from competitors and that they can sell back-to-school products year-round. Management is also confident they provide their customers with ease and convenience. Furthermore, they are confident they are prepared for the holiday season and that they can continue to keep SG&A costs low. Moreover, they are confident about the sustainability of elevated kitchen and cookware demand and that they can leverage their core disciplines to become more efficient