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KMART CORPORATION REPORTS FIRST-QUARTER SALES AND EARNINGS

 KMART CORPORATION REPORTS FIRST-QUARTER SALES AND EARNINGS
 TROY, Mich., May 18 /PRNewswire/ -- Kmart Corporation (NYSE: KM) reported increased 1992 first-quarter sales and net income, Chairman of the Board and Chief Executive Officer Joseph E. Antonini announced today.
 Net income for the 13 weeks ended April 29, 1992, increased 8.3 percent to $116 million from $107 million for the 13 weeks ended May 1, 1991. 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 26 cents, compared with 1991's 27 cents, as adjusted for the 2-for-1 stock split declared March 24, 1992. First-quarter sales reached a record $8.27 billion, an increase of 8.1 percent from $7.64 billion for the same period in 1991.
 The gross margin for the quarter was lower than a year ago, at 24.4 percent of sales vs. 24.8 percent, primarily reflecting the greater sales contribution of the lower-margined PACE Membership Warehouse operation in the first quarter of 1992. The pretax LIFO charge for the 1992 period was $22 million, compared with $30 million in the prior year.
 The selling, general and administrative (SGA) expense ratio was 0.4 percent lower at 21.8 percent of sales in the first quarter of 1992, vs. 22.2 percent of sales for the comparable 1991 period, as a result of the effectiveness of cost control programs at the Kmart store division and the greater sales contribution of PACE, which has substantially lower operating expenses as a percent to sales than other company businesses.
 In commenting on results, Antonini said, "Kmart customers have reacted favorably to our 'new look' stores and to our merchandising programs. The colder-than-normal weather, however, in both March and April adversely affected a number of important spring businesses such as our outdoor garden shop, home improvement and apparel. On a brighter note, sales in a number of big-ticket categories, most notably home electronics, continued to improve, strongly indicating that the economic environment continues to strengthen and that the weakness in some seasonal categories, which was especially evident in Northeast and Midwest markets, was weather-related."
 Antonini continued, "We are extremely pleased with the excellent progress made by the Kmart Specialty Retail Group in the 1992 first quarter. Sales were up 22.8 percent, with the gain on a comparable store basis 8.5 percent; and operating income increased 30.6 percent. We are particularly encouraged by the excellent profit gains at Builders Square and Pay Less Drug Stores and by the profitability at The Sports Authority that was achieved despite a very aggressive new store program. The loss at Waldenbooks, which was less than a year ago, reflects the seasonal nature of the book store business. Operating profits at PACE Membership Warehouse were penalized by heavy pre-opening costs, as five new warehouses were opened in the 1992 first quarter, vs. only one a year ago. OfficeMax generated extremely strong sales, with comparable store sales up 33.3 percent, and broke even for the quarter despite significant store opening costs and operating losses for stores opened in late 1991."
 Antonini added, "Our store opening, relocation, enlargement and refurbishment program is progressing on schedule. We completed 121 projects in the 1992 first quarter. At the end of the quarter, including stores completed in 1991 and 1990, 803 stores had been completed with the updated look, representing 36 percent of our U.S. Kmart stores. We are working to complete a total of 450-500 projects during 1992 so, by this year end, approximately 50 percent of the U.S. store base will be in the new modern format. The planned improvement in these updated stores is being realized."
 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 2,379 Kmart stores, is also the parent company for PACE Membership Warehouse, Builders Square, Pay Less Drug Stores, Waldenbooks, The Sports Authority and OfficeMax.
 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 29, 1992, AND MAY 1, 1991
 Sales
 Percent Change
 All Comp.
 (Millions in U.S. $) 1992 1991 Stores Stores
 General merchandise
 United States $5,633 $5,451 3.3 1.3
 Canada 214 222 (3.4) (3.5)
 Total general merchandise 5,847 5,673 3.1 1.1
 Specialty retail group
 PACE Membership Warehouse 966 793 21.9 12.6
 Builders Square 558 488 14.4 8.6
 Pay Less Drug Stores 477 415 15.0 (0.6)
 Waldenbooks 244 235 4.1 4.2
 The Sports Authority 82 40 102.9 19.5
 OfficeMax(a) 92 N/A --- 33.3(a)
 Total specialty retail
 group 2,419 1,971 22.8 8.5(a)
 Total Kmart $8,266 $7,644 8.1 3.0(a)
 Operating Income
 (Millions in U.S. $) 1992 1991 Percent Change
 General merchandise
 United States $252 $242 4.1
 Canada (1) 1 ---
 Total general merchandise 251 243 3.4
 Specialty retail group
 PACE Membership Warehouse --- 3 ---
 Builders Square 15 12 29.0
 Pay Less Drug Stores 21 18 18.9
 Waldenbooks (9) (10) 10.1
 The Sports Authority 2 (1) ---
 OfficeMax(a) --- N/A ---
 Total specialty retail
 group 29 22 30.6
 Total Kmart $280 $265 5.7
 (a) -- OfficeMax was acquired in November 1991. On a pro forma basis, total sales increased 89.6 percent and comparable store sales were up 33.3 percent. Excluding OfficeMax, the comparable store sales increases for the Total Specialty Retail Group and for Total Kmart were 7.9 percent and 2.8 percent, respectively.
 KMART CORPORATION
 (In millions)
 13 Weeks Ended Percent
 April 29, May 1, Inc.
 1992 1991 (Dec.)
 Sales $8,266 $7,644 8.1
 Licensee fees and
 other income 60 62 (3.6)
 Gross revenue 8,326 7,706 8.1
 Cost of merchandise sold 6,247 5,747 8.7
 Selling, general and
 administrative expenses 1,802 1,695 6.3
 Interest - net
 Debt 56 57 (1.8)
 Capital leases 45 44 2.8
 Income before income taxes 176 163 8.2
 Income taxes 60 56 7.9
 Net income $116 $107 8.3
 Earnings per common and
 common equivalent share $.26 $.27 (3.7)
 Weighted average shares 454.4 402.5
 Effective income tax rate 34.0 pct 34.1 pct
 Per-share amounts and weighted average shares have been adjusted to reflect the 2-for-1 stock split declared March 24, 1992.
 -0- 5/18/92
 /CONTACT: Orren F. Knauer of Kmart, 313-643-1040/
 (KM) CO: Kmart Corporation ST: Michigan IN: REA SU: ERN


ML-SM -- DE003 -- 1132 05/18/92 08:54 EDT
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