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Kohl's Forecasting

In: Business and Management

Submitted By 564411757
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After review the Kohl’s 10K report, I calculated the sales growth, cost of good sold, SG&A, interest expense non-operating income and effective tax rate. I also forecasted these amounts based on the company’s new strategy and the historical numbers. The attachment worksheet will show the numbers I forecasted.
Through reviewing the company’s sales growth from 2005 to 2009. I think the company was greatly influenced by the financial crisis in 2008 because the sales growth at that time was -0.5%. It can be sure that during 2008, the company suffered losses. However, after 2008, the company recovered the losses and started to make money again. During 2010, the total net sales were $18.3, a 7.06% increase over 2009. So the sales growth increased significantly compared to 4.8% in 2009. The reasons for this big increase are first, the E-commerce revenues increased over 40% and second, the company opened new 12 stores. However, during 2011, the sales growth decreased to 2.25%. One of the biggest reasons is because the company changed their strategy during 2011. Before 2011, the company used pricing strategy to compete with their competitors. However, the company increased its selling price per unit and last it for an entire year, which changed their pricing strategy, so the annual sales begun to fall. But, in 2012, the company reduced its selling price per unit during holiday seasons and higher apparel costs, especially in the first six months of 2012, which were only partially offset by higher selling prices early in the year. Also, the E-commerce businesses have a great influence in the sales growth. So my forecast for the sales in the following years will about 2.5% and become better.
Total cost of products sold, including product development costs, net of vendor payments other than reimbursement of specific, incremental and identifiable costs; inventory

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