Kohl’s Reports First Quarter Fiscal 2021 Financial Results

The Commission finds: *The Postal Service’s stated goals for the proposal appear reasonable. *The Postal Service assumed factors necessary for successful implementation of the proposal that have not been demonstrated. *It is unclear when the Postal Service plans to realize the full impact of its proposed changes to the service standards. The proposed changes may have a positive impact on the Postal Service’s ability to meet its service performance targets. *The Postal Service’s cost-saving estimates of the proposed changes may be inflated and the proposed changes would not substantially affect the Postal Service’s overall financial condition. *Flaws in the Postal Service’s transportation model could diminish its reliability. The Postal Service’s surface network impact projections and estimated cost changes are potentially inaccurate and unachievable. *The Postal Service has not demonstrated that it is operationally capable of running the complex surface network modeled to support the service standard changes it plans to implement. *Implementing processing and transportation changes prior to peak season may be challenging due to the continuation of the COVID-19 emergency and stress on the logistics industry. In general, the Commission finds that the proposed changes appear to be consistent with applicable statutory requirements. Nevertheless, the Postal Service has not demonstrated that its implementation of the proposed changes will satisfy the requirements.

Third quarter operating income improved due to higher revenue per shipment and a net fuel benefit at all transportation segments. The quarter's results also benefited from lower variable compensation expense and less severe winter weather, resulting in favorable year-over-year comparisons. The improved results were partially offset by the effects of the Omicron variant, as well as higher purchased transportation costs and wage rates. FedEx Ground operating results declined primarily due to increased rates for purchased transportation and employee wages, network inefficiencies, and expansion-related costs. These costs were partially offset by higher revenue per package, a boost from two additional ground commercial operating weekdays, and a net fuel benefit. Average daily volume was flat, as Ground Economy declined and growth in commercial and FedEx Home Delivery services was constrained by the effects of the Omicron variant. FedEx Freight third quarter operating income nearly tripled, driven by a continued focus on revenue quality and profitable growth. Revenue per shipment increased 19% and average daily shipments grew 2% during the quarter, while the operating margin increased 850 basis points to 15.0%.

Total Company net sales for the three months ended April 30, 2023, increased 5.9% to a record $1.11 billion. Total Retail segment net sales increased 4%, with comparable Retail segment net sales increasing 5%, partially offset by a 1% negative impact of foreign currency translation. The increase in Retail segment comparable net sales was driven by high single-digit positive growth in digital channel sales and low single-digit positive growth in retail store sales. By brand, comparable Retail segment net sales increased 17% at the Free People Group and 13% at the Anthropologie Group and decreased 13% at Urban Outfitters. Wholesale segment net sales decreased 11% driven by a 14% decrease in Free People Group wholesale sales due to a decrease in sales to department stores and specialty customers, while Urban Outfitters wholesale sales increased by $1 million. Nuuly segment net sales increased by $28.6 million driven by a 118% increase in our subscribers as of the current quarter end versus the end of the prior year’s comparable quarter.