...Weak Comps a Rating Concern: The Negative Outlook reflects Fitch Ratings' concern about Kohl's Corporation's (Kohl's) soft comps trend and the resulting pressure on EBITDA since late 2011 given the difficult traffic trends and slowdown in the growth of exclusive and private brands. Fitch expects Kohl's would need to stabilize its store-level comps and grow overall comps by approximately 2% to maintain market share against the competition from alternative channels. The inability to stabilize the store-level comps could pressure ratings in the next 12¡ 24 months. Industry Leading Operating Margins: Kohl's EBITDA margin has decreased to approximately 14% in the past two years from its peak level of nearly 16% in 2010/2011, and is expected to be flat to modestly lower over the next two years. The margin declines reflect the top-line pressure and Kohl's investment in sharper pricing and inventory repositioning over the last several quarters. However, the current level is still on par with other...
