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    Kohl's Annual report: Why did net sales increase in 2006?

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    The income statement on page F-4 of the most recent annual report for Kohl's Corporation indicates that the dollar amount for Net Sales (net revenue) reported for 2007 increased as compared to the amount reported for 2006. After you have reviewed the Management Analysis and Discussion, why do you think Net Sales increased?

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    Solution Preview

    I reviewed the management summary paying close attention to the sections that would impact sales, cost of sales and gross margin.

    Here are the relevant facts:

    1. Opened 112 new stores in 2007 and 85 new stores in 2006
    2. At year end, there are 929 stores in total
    3. Net sales per square foot of retail space are down from $256 in 2006 to $249 in 2007, but both exclude e-commerce
    4. Fiscal year end was a 53 week year in 2006, and a 52 week year in 2007. (It is common for retail to use the 52-53 week ...

    Solution Summary

    As extracted from the annual report, the solution gives a list of 8 relevant factos used to explain the decrease in sales. There are four paragraphs of tentative conclusions about sales, cost of sales and gross margin.