Debt |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Aug. 02, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt | 3. Debt Outstanding borrowings under the $1.5 billion revolving credit facility, recorded as short-term debt, were $75 million as of August 2, 2025, $290 million as of February 1, 2025, and $410 million as of August 3, 2024. Long-term debt, which excludes borrowings on the revolving credit facility, consists of the following secured and unsecured debt:
Our estimated fair value of secured and unsecured senior long-term debt is determined using Level 1 inputs, using financial instruments with unadjusted, quoted prices listed on active market exchanges. The estimated fair value of our secured and unsecured senior debt was $1.1 billion at August 2, 2025, $1.2 billion at February 1, 2025, and $1.2 billion at August 3, 2024. In December 2024, S&P downgraded our senior unsecured credit rating from BB to BB- and Moody’s downgraded our rating from Ba3 to B1. As a result of the downgrades, the interest rate on our 3.375% notes due May 2031 increased an additional 50 basis points in May 2025 due to the coupon adjustment provision within the notes. During the second quarter 2025, Moody's downgraded our senior unsecured credit rating from B1 to B3, however, further downgrades by Moody's do not trigger incremental interest rate increases. In total, the interest rate on the notes due May 2031 have increased 175 basis points since their issuance. In May 2025, we issued $360 million aggregate principal amount of 10.000% senior secured notes due 2030 and received proceeds of $357 million, net of the debt discount. The notes are guaranteed by certain of our subsidiaries. Certain of these guarantees are secured by eleven distribution centers and E-commerce Fulfillment Centers, which are held by our subsidiaries, as well as the equity interests in one of our subsidiaries. The terms of the notes contain covenants that limit Kohl’s ability to grant or incur liens on the collateral; incur, assume or guarantee additional indebtedness; sell or otherwise dispose of assets that are collateral; and make certain restricted payments. Additionally, upon the occurrence of certain change of control repurchase events, we would be required to offer to repurchase the notes for at least 101% of the aggregate principal amount of the notes being repurchased, plus all accrued but unpaid interest as of the date of repurchase. Further, the terms of the notes set forth certain events of default after which the notes may be declared immediately due and payable and set forth certain types of bankruptcy or insolvency events of default. In July 2025, $353 million in aggregate principal amount of our 4.25% notes matured and were repaid. In the second quarter of 2024, we completed a voluntary redemption of the remaining $113 million outstanding 9.50% notes due May 15, 2025. Our various debt agreements contain covenants including limitations on additional indebtedness and certain financial tests. As of August 2, 2025, we were in compliance with all covenants of the various debt agreements. |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||