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KMART CORPORATION REPORTS 1993 FIRST-QUARTER SALES AND EARNINGS

 TROY, Mich., May 17, 1993 /PRNewswire/ -- Kmart Corporation
 (NYSE: KM) reported increased sales but lower net income for the
 1993 first quarter, chairman of the board and chief executive
 officer Joseph E. Antonini announced today.
 Net income before an extraordinary item and the effects of
 accounting changes for the 13 weeks ended April 28, 1993 declined
 57.1% to $50 million from $116 million for the 13 weeks ended
 April 29, 1992. Earnings per share on the same basis were 11 cents,
 compared with 1992's 26 cents, as adjusted for the 2-for-1 stock
 split distributed June 5, 1992. First-quarter sales reached
 $9.03 billion, an increase of 9.2% from $8.27 billion for the same
 period in 1992.
 In the first quarter of 1993, the company recorded an extraordinary
 charge of $10 million, net of applicable income taxes, equal to two
 cents per share resulting from a redemption premium for the early
 redemption of $200 million of 10 1/2% Sinking Fund Debentures due
 December 1, 2017. In addition, as a result of adopting Financial
 Accounting Standard No. 109, which requires that deferred taxes be
 calculated using the liability approach rather than the deferred
 method, and Financial Accounting Standard No. 106, which requires
 the company to accrue for future postretirement medical benefits,
 the company recorded a net charge for accounting changes of
 $17 million, net of applicable taxes, equal to four cents per share.
 The gross margin for the quarter was lower than a year ago, at 23.6%
 of sales versus 24.4%, primarily reflecting a sales mix skewed
 towards lower-margined items in the U.S. Kmart stores. The cooler-
 than-normal weather in the first quarter of 1993 adversely affected
 sales in the high gross margin apparel and horticulture departments.
 The pretax LIFO charge for the 1993 period was $14 million, compared
 with $22 million in the prior year.
 The selling, general and administrative (SGA) expense ratio was 0.3%
 higher at 22.1% of sales in the first quarter of 1993, versus 21.8%
 of sales for the comparable 1992 period, as a result of the below-
 plan sales which more than offset the cost control programs that
 have been implemented at the Kmart store division and in the
 specialty store group.
 Net interest expense on debt was $78 million, up 40.6% from
 $56 million in the 1992 first quarter. The increase was the result
 of greater borrowings resulting from higher inventory levels in the
 1993 period and the acquisitions made in 1992 and of BizMart in
 March 1993.
 "Sales in April were much improved from results in February and
 March which were severely impacted by winter storms," said Antonini.
 "This pickup in sales in the U.S. Kmart stores was most pronounced
 in hardline merchandise categories, with the exception of our garden
 shop business. The weakness in that department, combined with
 below-plan apparel business throughout the first quarter, adversely
 affected the profitability of the discount stores during the 1993
 first quarter. The profit shortfall for the period can be largely
 attributed to the poor results in March."
 "The adverse weather conditions also affected our specialty store
 group, particularly Builders Square. Its early spring business,
 especially in treated lumber and landscaping categories, was much
 weaker than last year. In addition, Builders Square first-quarter
 profits were impacted by a $4 million increase in pre-opening costs,
 associated with a more aggressive expansion program, and by the
 entry of new competitors in several of its key markets. PACE
 Membership Warehouse results continue to be disappointing, in part
 reflecting industry rather than company-specific conditions. We are
 generally pleased with the performance of the other specialty store
 businesses but, with the poor results at PACE and Builders Square,
 the profitability of the group declined significantly."
 "Sales trends have improved significantly in the first half of May,
 especially in key markets in the East, Midwest and South. As
 temperatures have become more seasonable, consumers have responded
 very well to our spring and summer merchandise categories. This
 suggests that the unsatisfactory results in the first quarter were
 largely weather related and encourages us with respect to the
 remainder of the year. Going forward, our business will be
 influenced importantly by the strength in consumer spending and
 weather patterns which, hopefully, will be more seasonable than in
 the first quarter."
 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 2,412 Kmart
 stores, is also the parent company for PACE Membership Warehouse,
 Builders Square, PayLess Drug Stores, 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.
 KMART CORPORATION
 SALES AND OPERATING INCOME BY BUSINESS
 13 WEEKS ENDED APRIL 28, 1993 AND APRIL 29, 1992
 SALES
 % Change
 All Comparable
 (Millions U.S. $) 4-28-93 4-29-92 Stores Stores
 General Merchandise
 United States $ 5,825 $ 5,633 3.4 1.6
 International 229 214 6.9 (1.7)(b)
 Total General Merchandise 6,054 5,847 3.5 1.4
 Specialty Retail
 PACE Membership Warehouse 1,071 966 10.8 (5.7)
 Builders Square 602 558 7.9 (4.1)
 PayLess Drug Stores 605 477 26.7 (2.5)
 Waldenbooks 244 244 0.1 1.3
 The Sports Authority 119 82 46.6 (2.1)
 OfficeMax 290 92 214.3 13.7
 Borders(a) 42 N/A - 9.2 (a)
 Total Specialty Retail 2,973 2,419 22.9 (3.0)(a)
 Total Kmart $ 9,027 $ 8,266 9.2 0.1 (a)
 OPERATING INCOME
 (Millions U.S. $) 4-28-93 4-29-92 % Change
 General Merchandise
 United States $ 210 $ 252 (16.3)
 International - (1) -
 Total General Merchandise 210 251 (15.8)
 Specialty Retail
 PACE Membership Warehouse (24) - -
 Builders Square 1 15 (96.5)
 PayLess Drug Stores 21 21 0.2
 Waldenbooks (7) (9) 23.5
 The Sports Authority 1 2 (55.6)
 OfficeMax - - -
 Borders(a) - N/A -
 Total Specialty Retail (8) 29 -
 Total Kmart $ 202 $ 280 (27.7)
 (a) Borders was acquired in November 1992. On a proforma basis,
 total sales increased 90.9% and comparable store sales were up 9.2%.
 Excluding Borders, the comparable store sales changes for Total
 Specialty Retail and Total Kmart were (3.1%) and 0.1%, respectively.
 (b) International Comparable Store Sales Change is calculated on
 sales in the applicable local currency.
 %
 13 Weeks Ended Inc.
 4-28-93 4-29-92 (Dec.)
 (Millions U.S. $)
 Sales $ 9,027 $ 8,266 9.2
 Licensee fees and
 other income 65 60 8.1
 Gross revenue 9,092 8,326 9.2
 Cost of merchandise sold 6,894 6,247 10.3
 Selling, general and
 administrative expenses 1,996 1,802 10.8
 Interest - net
 Debt 78 56 40.6
 Capital leases 48 45 6.5
 Income before income taxes 76 176 (56.7)
 Income taxes 26 60 (56.0)
 Income before extraordinary
 item and the effect of
 accounting changes 50 116 (57.1)
 Extraordinary item 10 - -
 Effect of accounting changes 17 - -
 Net income $ 23 $ 116 (80.7)
 Earnings per common and
 common equivalent share:
 Before extraordinary item
 and the effect of accounting
 changes $ .11 $ .26 (57.7)
 Extraordinary item .02 - -
 Effect of accounting changes .04 - -
 Net Income $ .05 $ .26 (80.8)
 Weighted average shares 463.3 454.4
 -0- 5/17/93
 /CONTACT: Orren F. Knauer or Lois M. Connelly, Investor Relations, Kmart Corporation, 313-643-1040/
 (KM)


CO: Kmart Corporation ST: Michigan IN: REA SU: ERN

ML -- DE008 -- 9033 05/17/93 09:04 EDT
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Date:May 17, 1993
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