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KMART CORPORATION REPORTS RECORD 1991 4TH-QUARTER AND FULL-YEAR SALES AND EARNINGS

 KMART CORPORATION REPORTS RECORD 1991 4TH-QUARTER
 AND FULL-YEAR SALES AND EARNINGS
 TROY, Mich., March 4 /PRNewswire/ -- Kmart Corporation (NYSE: KM) reported record 1991 fourth-quarter and full-year sales and earnings, Chairman of the Board and Chief Executive Officer Joseph E. Antonini announced today.
 For the 1991 year ended Jan. 29, 1992, net income increased 13.6 percent to $859 million from $756 million for the 1990 year. 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 rose 6.6 percent to $4.03 from 1990's $3.78 per share. Sales in 1991 reached a record $34.58 billion, an increase of 7.8 percent from $32.07 billion for the year ended Jan. 30, 1991.
 Net income for the fourth quarter of 1991 increased 19.2 percent to $479 million from 1990's $402 million. Earnings per share were $2.11, compared with $2.01 in the year-ago period, the comparison affected by the increase in the average number of common and common equivalent shares. Sales rose 8.3 percent to $10.56 billion from $9.75 billion for the same 13-week period of 1990.
 The gross margin for the full year was lower than a year ago, at 25.0 percent of sales vs. 25.5 percent, primarily reflecting the greater sales contribution of the lower-margined PACE Membership Warehouse operation in 1991. The pretax LIFO charge for 1991 was $15 million, compared with $57 million for the prior year. For the 1991 fourth quarter, there was a pretax LIFO credit of $53 million, vs. a pretax LIFO credit of $40 million in the 1990 fourth quarter.
 The selling, general and administrative (SGA) expense ratio was 0.7 percent lower at 21.2 percent of sales in 1991, vs. 21.9 percent of sales for 1990, 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, "The 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 resulted in record-high earnings in 1991."
 Antonini added, "Our store opening, relocation, enlargement and refurbishment program is progressing on schedule. In 1991, 474 projects were completed. We opened 55 new full-size Kmart stores, replaced 51 stores, enlarged 164 stores, closed 11 stores and refurbished 204 stores to bring their layout and fixturing up to new store standards. At 1991 year end, including stores completed in 1990, 682 stores had been completed with the updated look, representing 30 percent of our U.S. Kmart stores. Customer acceptance of the layouts, fixturization and new merchandising assortments has been very good, and sales results have exceeded expectations. We are working to complete another 450-500 projects during 1992. By this year end, approximately 50 percent of the U.S. Kmart store base will be in the new modern format."
 Antonini continued, "We have placed great emphasis on being on-trend in our merchandise assortments throughout the store. The word 'fashion' is now applied to practically our entire merchandise offering. There is on-trend fashion in apparel and in our jewelry, bed and bath, kitchenware and home furnishings departments. These merchandise categories contributed importantly to our record results."
 Antonini also noted, "Other strategic programs are producing the anticipated improvements at the store level. Our commitment to pricing leadership is having a most positive impact on our business. Our point- of-sale systems, the Kmart Satellite network and automated replenishment when combined with a newer initiative -- Partners in Merchandise Flow, which involves state-of-the-art, just-in-time merchandise delivery and Electronic Data Interchange with our key vendors -- are resulting in better merchandise buying and order flow and an improved in-stock position in the stores."
 Antonini continued, "Our Specialty Retail Group made excellent progress in 1991, contributing $9.0 billion in sales and $245 million in operating profits, compared with $7.2 billion in sales and $165 million in operating profits in 1990. We have developed a portfolio of high- volume, low-cost and low-price retail businesses outside our core discount store division that will provide excellent growth opportunities for Kmart."
 Antonini concluded, "There are early signs that the economic environment is strengthening which would undoubtedly foster some improvement in consumer confidence and spending. Our renewal program, our leadership in pricing, our heavy capital investment in retail automation and continued expansion of our specialty retail formats have positioned Kmart to participate in any upturn in consumer spending."
 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 2,375 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
 Sales and Operating Income by Business
 Years ended Jan. 29, 1992 and Jan. 30, 1991
 (Millions U.S. $)
 Pct. Change
 Sales All Comp.
 1991 1990 stores stores
 General Merchandise
 United States $24,488 $23,792 2.9 2.2
 Canada 1,060 1,099 (3.6) (1.9)
 Total General
 Merchandise 25,548 24,891 2.6 2.1
 Specialty Retail Group
 PACE Membership
 Warehouse 3,646 2,295 58.9 16.5
 Builders Square 2,049 1,890 8.4 7.0
 Pay Less Drug Stores 1,892 1,642 15.2 2.7
 Waldenbooks 1,139 1,064 7.1 5.8
 The Sports Authority 241 105 --- 15.3
 OfficeMax(a) 65 --- --- ---
 Other --- 183 --- ---
 Total Specialty Retail
 Group 9,032 7,179 25.8 9.0
 Total Kmart $34,580 $32,070 7.8 3.7
 Operating Income Pct.
 1991 1990 Change
 General Merchandise
 United States $ 1,367 $ 1,257 8.8
 Canada 23 42 (44.7)
 Total General Merchandise 1,390 1,299 7.1
 Specialty Retail Group
 PACE Membership
 Warehouse 39 12 ---
 Builders Square 74 58 27.2
 Pay Less Drug Stores 90 77 16.1
 Waldenbooks 38 29 28.5
 The Sports Authority 3 (3) ---
 OfficeMax(a) 1 --- ---
 Other --- (8) ---
 Total Specialty Retail
 Group 245 165 48.4
 Total Kmart $1,635 $1,464 11.7
 (a) -- Includes sales and operating income for the two months ended Jan. 29, 1992. For the full year, on a proforma basis, sales were $245 million and the comparable store sales increase was 20.2 percent.
 KMART CORPORATION
 (In Millions)
 13 Weeks Ended 52 Weeks Ended
 Pct. Pct.
 Jan. 29, Jan. 30, Inc. Jan. 29, Jan. 30, Inc.
 1992 1991 (Dec.) 1992 1991 (Dec.)
 Sales $10,560 $9,747 8.3 $34,580 $32,070 7.8
 Licensee fees and
 other income 158 156 1.4 389 382 1.9
 Gross revenue 10,718 9,903 8.2 34,969 32,452 7.8
 Cost of
 merchandise sold 7,893 7,305 8.0 25,930 23,895 8.5
 Selling, general
 & administrative
 expenses 2,004 1,903 5.3 7,337 7,012 4.6
 Interest - net
 Debt 49 46 6.9 219 222 (1.5)
 Capital leases 47 46 2.7 182 177 3.2
 Income before
 income taxes 725 603 20.2 1,301 1,146 13.5
 Income taxes 246 201 22.1 442 390 13.3
 Net income $479 $402 19.2 $859 $756 13.6
 Earnings per common
 and common
 equivalent share $2.11 $2.01 5.0 $4.03 $3.78 6.6
 Cash dividends
 declared per
 common share $.44 $.43 2.3 $1.76 $1.72 2.3
 Weighted average
 shares 226.7 200.1 --- 213.1 200.1 ---
 Effective income
 tax rate (pct.) 33.9 33.3 --- 34.0 34.0 ---
 Kmart Corporation's stock is listed on the New York, Pacific and Midwest stock exchanges. Its trading symbol is KM.
 -0- 3/4/92
 /CONTACT: Orren F. Knauer of Kmart Corporation, 313-643-1040/
 (KM) CO: Kmart Corporation ST: Michigan IN: REA SU: ERN


DH-KK -- DE001 -- 4810 03/04/92 09:06 EST
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