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KMART CORPORATION REPORTS THIRD-QUARTER SALES AND EARNINGS

       KMART CORPORATION REPORTS THIRD-QUARTER SALES AND EARNINGS
    TROY, Mich., Nov. 18 /PRNewswire/ -- Kmart Corporation (NYSE: KM) reported third-quarter sales and earnings, Chairman of the Board and Chief Executive Officer Joseph E. Antonini announced today.
    Net income for the 13 weeks ended Oct. 30, 1991, increased 3.4 percent to $109.5 million from $105.9 million for the 13 weeks ended Oct. 31, 1990.  However, reflecting an increase in the average number of common and common equivalent shares because of a PERCS offering in August 1991, earnings per share were 50 cents, down from 1990's 53 cents.  Third-quarter sales rose 6.4 percent to $7.97 billion from 1990's $7.49 billion for the same period.
    Net income for the first 39 weeks of 1991 increased 7.3 percent to $379.8 million from 1990's $354.0 million.  Earnings per share were $1.83, compared with $1.77 in the year-ago period.  Sales rose 7.6 percent to $24.02 billion from $22.32 billion for the same 39-week period of 1990.
    The gross margin for the quarter was lower than a year ago, at 25.0 percent of sales vs. 25.7 percent, primarily reflecting the greater sales contribution of the lower-margined PACE Membership Warehouse operation in the third quarter of 1991.  The pretax LIFO charge for the third quarter of 1991 was $22.5 million, compared with $32.5 million for the same period of the prior year.  For the 39-week periods, the pretax LIFO charge amounted to $67.5 million in 1991 and $97.5 million in 1990.
    The selling, general and administrative (SGA) expense ratio was 0.5 percent lower at 22.6 percent of sales in the third quarter of 1991, vs. 23.1 percent of sales for the comparable 1990 period, as a result of the greater sales contribution of PACE, which has substantially lower operating expenses as a percent to sales than other company businesses. In addition, the expense ratio benefited from the effectiveness of cost- control programs.
    In commenting on results, Antonini said, "The still-weak economic environment adversely affected sales of electronics and other big-ticket categories.  However, improved profitability of our Kmart Fashions division and strong sales and earnings gains in our specialty store businesses helped third-quarter earnings approximate plan."
    Antonini added, "Our store opening, relocation, enlargement and refurbishment program continues to progress.  We completed 188 projects in the third quarter bringing the year-to-date count to 396 and keeping us on track to complete 450-500 projects by year end.  We continue to be pleased with the performance of the updated stores.  By year end, approximately 700 Kmart stores will be in the new modern format, and we plan to complete another 450-500 projects in 1992."
    Looking to the balance of 1991, Antonini concluded, "Our enhanced merchandising programs and our continuing attention to expense reduction through retail automation leave us poised to benefit significantly from any acceleration in the pace of sales in the months ahead."
    Kmart Corporation serves America with over 4,000 retail outlets in all 50 states in the United States and in Puerto Rico and Canada. Kmart, currently operating 2,356 Kmart stores, is also the parent company for Pay Less Drug Stores, Builders Square, Waldenbooks, PACE Membership Warehouse and The Sports Authority.
    Kmart Corporation's stock is listed on the New York, Pacific, Midwest and Tokyo stock exchanges.  Its trading symbol is KM.
                           KMART CORPORATION
                             (In millions)
                               13 Weeks Ended       Percent
                             Oct. 30     Oct. 31      Inc.
                              1991        1990       (Dec.)
    Sales                    $7,971.3    $7,493.3      6.4
    Licensee fees and
     other income                78.9        74.5      5.8
    Gross revenue             8,050.2     7,567.8      6.4
    Cost of merchandise sold  5,981.0     5,568.5      7.4
    Selling, general and
     administrative expenses  1,802.9     1,733.8      4.0
    Interest - net
    Debt                         53.3        62.8    (15.0)
    Capital leases               46.9        44.7      4.8
    Income before income taxes  166.1       158.0      5.0
    Income taxes                 56.6        52.1      8.3
    Net income                 $109.5      $105.9      3.4
    Earnings per common and
     common equivalent share     $.50        $.53     (5.7)
    Cash dividends declared
     per common share            $.44        $.43      ---
    Weighted average shares     219.8       200.1      ---
    Effective income tax
     rate (percent)              34.1        33.0      ---
                              39 Weeks Ended       Percent
                             Oct. 30     Oct. 31      Inc.
                              1991        1990       (Dec.)
    Sales                   $24,020.0   $22,322.5      7.6
    Licensee fees and
     other income               230.7       225.7      2.2
    Gross revenue            24,250.7    22,548.2      7.6
    Cost of merchandise sold 18,036.7    16,589.2      8.7
    Selling, general and
     administrative expenses  5,333.2     5,109.5      4.4
    Interest - net
    Debt                        169.2       175.7     (3.7)
    Capital leases              135.5       131.1      3.4
    Income before income taxes  576.1       542.7      6.1
    Income taxes                196.3       188.7      4.0
    Net income                 $379.8      $354.0      7.3
    Earnings per common and
     common equivalent share    $1.83       $1.77      3.4
    Cash dividends declared
     per common share           $1.32       $1.29      ---
    Weighted average shares     207.9       200.1      ---
    Effective income tax
     rate (percent)              34.1        34.8      ---
    -0-               11/18/91 R
    /CONTACT:  Orren F. Knauer of Kmart, 313-643-1040/
    (KM) CO:  Kmart Corporation ST:  Michigan IN:  REA SU:  ERN ML -- DE001 -- 1298 11/18/91 09:55 EST
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Copyright 1991 Gale, Cengage Learning. All rights reserved.

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Date:Nov 18, 1991
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