Accounting and Fin analys
Your final project for this class asks you to assume the role of a newly hired manager at a publicly traded global company. Your task is to perform a financial analysis to assess the past and current financial performance and create a financial projection for the next three years. Review the Final Project Guidelines and Rubric document found in the Assignment Guidelines and Rubrics folder, and in your initial post, answer the following prompts:
- Choose a publicly traded company, or a non-publicly traded organization if your instructor verifies that the organization has sufficient financial information available to complete the project.
- Provide a brief description of the company, including history and industry (or industries) in which it operates.
- Summarize at least two financial issues confronting your organization or the industry in which your organization operates, which you have found in the business media (e.g., Bloomberg, Financial Times, Wall Street Journal, The Economist).
Kohl’s Introduction
Kohl’s Corporation trading as KSS in NYSE is one of the America’s largest department store chains holding a market value of 16 billion dollars. The company is known for its huge range of products from clothing, footwear, bedding, furniture, jewelry, beauty products, electronics, and housewares. The company operates in 1162 departmental stores covering 49 states of America and through an e-commerce website employing over 137,000 team members.
Company Background
The company came into existence in 1962 when Max Kohl opened the first Kohl’s Department Store in Brookfield, Wisconsin. He began his profession with a little basic grocery store business that transformed into the biggest supermarket store chain in the Milwaukee region. At that point he ventured into retail, making Kohl’s Department Stores. He placed Kohl’s between the high-end retail establishments and the discounters, offering everything from treat to motor oil to donning hardware. Max Kohl with a remarkable business understanding expanded to 5 stores in mere 10 years after coming into existence and proved everything was possible.
Market Share
Kohl’s designed the market share strategy to accomplish beneficial development. The company follows a growth strategy of developing exclusive collections of world-class brands for its customers. In 1992, Kohl’s became a public company and was listed on the New York Stock Exchange. The company’s initial public offering took place with 11.1 million shares with 79 stores in the Midwest. Kohl’s is headquartered in Menomonee Falls, Wisconsin. It has shown a dramatic rise in terms of stores and revenues from 1992 to 1999. The company grew from 79 stores to 259 stores and exceeded the revenue from $1.1 billion to $4.56 billion. In 2001, online shopping site Kohls.com was launched to reach the mass market through the internet. Kohl’s has the highest number of stores in California accounting to 126 stores state wide. The hunger for growth has transformed Kohl’s from the initial stage with just 40 stores in 1986 to 1162 stores today.
Current Plans
In 2015, Kohl’s unveiled its strategic framework called the Greatness Agenda. The agenda supports five pillars to maximize the customer experience by providing amazing product, incredible savings, easy experience, personalized connections and winning teams. It also announced forward looking statements to increase sales to $21 billion, be in the 90thpercentile for associate engagement and best-in-class for customer engagement (Business wire, 2015).
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Under Armour Inc., NYSE: UA, was found in 1996 by Kevin Plank, a then 23-year-old former special teams captain of the University of Maryland football team. As a former captain, Plank had noticed that compression shorts stayed dry during practice. He decided to take that same material to create moisture wicking gear. The startup funding for Under Armour’s came from Planks personal savings and credit card debt. During college, Plank had saved about $20,000 by selling t-shirts at concerts. He ended up going about $40,000 in credit card debt spread across five cards. By 1997 (one year after founding the company), he was broke.
Then, he made his first sale to Georgia Tech for about $17,000, two-dozen NFL teams soon followed suit. At the end of his second year, he had sold $100,000 in product. Later in 1999, Under Armour received its first big break, when Warner Brothers contacted Under Armour to outfit two of its feature films, Oliver Stone’s Any Given Sunday and The Replacements. In Any Given Sunday, Willie Beamen wore an Under Armour jockstrap. Leveraging the release of Any Given Sunday, Plank purchased an ad in ESPN The Magazine, which generated close to $750,000 in sales. Since, then the product took off and major teams and retailers began carrying the product, creating a multi-million dollar business that now does nearly $3B in sales and has over 5,900 employees.
While Under Armour’s initial funding came from Plank himself, the company went public less than 10 years after it’s founding to raise $115 Million for expansion capital. The stock doubled in its first day of trading. The company has since sold additional shares of the company to help fuel its continued growth.
The expansion of Under Armour’s product lines, such as Turf Gear, All season Gear, and Street Gear put Under Armour at the forefront of the emerging performance apparel industry. In 2003, Under Armour launched their Women’s Performance Gear product line and later in 2006 Under Armour began offering footwear. Shoes are Under Armour’s fastest growing product line, growing 31% from 2011 to $239 million in sales in 2012.
Under Armour still has a long way to go to catch up to rivals Nike Inc. and Adidas, both of which post annual sales in the tens of billions. To do so, Under Armour has been working to make its wares desirable among style-setters, and not just the sporting-goods crowd, the company’s executive vice president of global marketing, Adam Peake, said in May.
Under Armour also has sought gains in the fitness industry. The company said it added 20 million unique users to the digital fitness platform it built through acquisitions this past winter. Total unique users of those platforms now stand at 140 million across the company-acquired networks of MapMyFitness, Endomondo and MyFitnessPal.
The fast-growing sportswear maker, Under Armour, said its second-quarter, of 2015, revenue rose 29% to $783.6 million due to the company’s backing of sports stars including the National Basketball Association’s most valuable player, Stephen Curry, and golfer Jordan Spieth, who won this year’s Master’s and U.S. Open tournaments on the PGA Tour. But profit declined 16% to $14.8 million for the second consecutive quarter because of lasting effects from digital fitness acquisitions earlier in the year.
Under Armour is believed to take advantage of the success of its endorsed athletes, who also include ballerina Misty Copeland, by increasing marketing spending during the rest of the year. The company also raised its full-year forecast for sales to $3.84 billion from $3.78 billion; it estimates full-year profit growth to be between 14% and 15%. Shares in the company rose 7.3% to $95.93 on the New York Stock Exchange.
