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KMART CORPORATION ANNOUNCES RECORD 1992 SALES AND OPERATING INCOME AT PAYLESS DRUG STORES

 TROY, Mich., March 2, 1993 /PRNewswire/ -- Kmart Corporation
 (NYSE: KM) today announced record 1992 sales and operating income
 for its PayLess Drug Stores subsidiary.
 For the 1992 year ended January 27, 1993, PayLess Drug Stores
 operating income increased 26.4% to $113 million from $90 million in
 1991. Operating income included amortization of purchased
 intangibles of $3 million in 1992 and $8 million in 1991. Were it
 not for the decline in the amortization of purchased intangibles and
 lower LIFO charges, the gain in operating income would have been
 approximately 14%. Sales for the full year reached $2.33 billion,
 an increase of 23.4% over the $1.89 billion for the year ended
 January 29, 1992. Contributing to the sales increase in 1992 was
 the acquisition in July 1992 of the 124 unit Pay'n Save Drug Stores,
 Inc. Comparable store sales were flat over the same period.
 "This has been a year of tremendous growth for PayLess Drug Stores
 with a 38% increase in the number of stores," said Timothy R.
 McAlear, president and chief executive officer of PayLess Drug
 Stores. "We successfully completed the acquisition of 124 Pay'n
 Save stores in July 1992, which gives us presence in two new
 markets, Alaska and Hawaii, as well as increasing our market
 position in Washington State. We are continuing to focus on the
 core drug store departments and are positioning PayLess as a major
 provider of health-care-related merchandise and services. Our
 continuing growth in pharmacy sales is evidence of our commitment to
 develop our pharmacy franchise. Pharmacy sales increased 44.3% last
 year, with comparable store sales up 15.3%, and pharmacy sales in
 1992 represented 24% of total sales, versus 20% in 1991."
 "We are pleased with the profit performance in 1992 considering it
 was such a difficult year for sales," said McAlear. "The increase
 in operating income is most satisfying in view of the increased
 competition that put pressure on pricing in a non-inflationary
 environment. Comparable store sales were flat for the year but,
 excluding the 60 PayLess stores affected by newly opened 'big box'
 competition, comparable store sales were up 2.8% in 1992."
 PayLess Drug Stores, a wholly owned subsidiary of Kmart Corporation,
 operates 552 PayLess Drug stores in 12 states. Kmart Corporation
 serves America with over 4,000 retail outlets in all 50 states in
 the United States and in Puerto Rico, Canada, the Czech Republic and
 Slovakia. Kmart, currently operating 2,409 Kmart stores, is also
 the parent company for PACE Membership Warehouse, Builders Square,
 Waldenbooks, The Sports Authority, OfficeMax and Borders.
 Kmart Corporation's stock is listed on the New York, Pacific and
 Midwest Stock Exchanges. Its trading symbol is KM.
 -0- 3/2/93
 /CONTACT: Orren F. Knauer or Lois M. Connelly of Kmart Investor Relations, 313-643-1040; or Timothy R. McAlear, President & Chief Executive Officer, PayLess Drug Stores, 503-682-4100/
 (KM)


CO: Kmart Corporation; PayLess Drug Stores ST: Michigan, Oregon IN: REA SU: ERN

ML -- DE011 -- 1827 03/02/93 09:50 EST
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No portion of this article can be reproduced without the express written permission from the copyright holder.
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Publication:PR Newswire
Date:Mar 2, 1993
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