Kmart Reports $93 Million Profit
DETROIT (AP) _ Kmart Holding Corp. earned $93 million in its second straight profitable quarter since emerging from bankruptcy protection, but the discount retailer’s same-store sales continued to fall.
The company reported net income of 94 cents per share in the 2004 fiscal first quarter ended April 28. For the same period a year ago, while in bankruptcy and before its reorganization, its predecessor company lost $862 million, or $1.65 per share.
Kmart said the performance _ its fourth straight quarterly showing of year-over-year improvement in profitability _ was primarily due efforts to improve productivity and margins while cutting operational costs.
``These initiatives, together with a renewed focus on communicating the benefits of the Kmart shopping experience to our customers, will continue to characterize our approach going forward,″ Julian C. Day, Kmart’s president and chief executive, said in a statement. He added: ``Given our success, Kmart today is a financially strong company.″
Kmart’s shares rose $2.83 or 6.4 percent to $47.13 on the Nasdaq Stock Market.
First-quarter sales at Kmart’s stores open at least a year decreased 12.9 percent for the period compared with the 13 weeks ended April 30, 2003. Same-store sales comparisons take new stores and store closings out of the mix and are considered the best measure of a retailer’s health.
Kmart said the decrease in same-store sales was seen primarily because of several companywide promotional events that took place in its first quarter a year ago as well as cuts in advertising this year.
Total sales were down 25.3 percent to $4.62 billion from $6.81 billion in the first quarter of 2003. Kmart blamed the decline partly on the closure of 316 stores that took place in the 2003 first quarter.
Selling, general and administrative expenses for the quarter were cut to $1 billion from $1.42 billion a year ago.
Kmart Corp. closed nearly 600 stores and shed 57,000 employees after filing for bankruptcy protection in January 2002. It emerged about a year ago as Kmart Holding Corp. and in March reported its first profitable quarter in three years.
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Kmart Holding Corp.: http://www.kmartcorp.com