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KMART CORPORATION REPORTS RECORD 1992 FOURTH-QUARTER AND FULL-YEAR SALES AND EARNINGS

 TROY, Mich., March 2, 1993 /PRNewswire/ -- Kmart Corporation
 (NYSE: KM) reported record 1992 fourth-quarter and full-year
 sales, net income and earnings per share, chairman of the board
 and chief executive officer Joseph E. Antonini announced today.
 For the 1992 year ended January 27, 1993, net income increased 9.5%
 to $941 million from $859 million for the 1991 year. However,
 because of an increase in the average number of common and common
 equivalent shares as a result of a PERCS offering in August 1991,
 earnings per share were $2.06, compared with 1991's $2.02 per share,
 as adjusted for the 2-for-1 stock split distributed June 5, 1992.
 Sales in 1992 reached a record $37.72 billion, an increase of 9.1%
 from $34.58 billion for the year ended January 29, 1992.
 Net income for the fourth quarter of 1992 increased 11.7% to
 $535 million from 1991's $479 million. Earnings per share were a
 record $1.15, compared with $1.06 in the year-ago period, as
 adjusted for the 2-for-1 stock split. Sales rose 8.7% to $11.47
 billion from $10.56 billion for the same 13-week period of 1991.
 Earnings per share in 1992 were the highest in the history of the
 company, despite a one-time charge equal to $0.03 per share relating
 to the 1992 bankruptcy of Bargain Harold's, a Canadian subsidiary
 the company sold in 1990; a substantial profit shortfall at PACE
 Membership Warehouse; and the 7.4% increase in the average number of
 common and common equivalent shares primarily as a result of the
 PERCS offering in August 1991.
 "Customers are reacting favorably to our 'new look' Kmart stores,
 merchandise quality, fashion and pricing leadership," said Antonini.
 "These factors significantly contributed to the improvement in our
 1992 sales and net income and were key to our record year."
 The gross margin for the full year was lower than a year ago, at
 24.5% of sales versus 25.0%, reflecting increased clearance
 markdowns of spring and summer merchandise lines, especially
 apparel, and the greater sales contribution of the lower-margined
 PACE Membership Warehouse operation in 1992. The margin pressure
 earlier in the year was partially offset by an excellent sell-thru
 of seasonal and apparel merchandise during the Christmas season,
 resulting in fewer clearance sales at markdown prices which aided
 gross margin in the 1992 fourth quarter. There was a pretax LIFO
 credit for 1992 of $30 million, in contrast to a pretax LIFO charge
 of $15 million for the prior year. For the 1992 fourth quarter,
 there was a pretax LIFO credit of $75 million, versus a pretax LIFO
 credit of $53 million in the 1991 fourth quarter.
 "In an extremely competitive retail environment in 1992 and
 reflecting our ability to reduce product procurement costs from our
 vendors, Kmart continued to provide quality products at low, low
 prices," said Antonini. "Because of our price reduction program,
 the inflation index of the U.S. Kmart division was a negative 1.2%
 last year. This contributed to the $30 million pretax LIFO credit
 in 1992. However, the impact of lower prices on Kmart goes far
 beyond the LIFO calculation. Lower retail prices adversely affected
 dollar sales and, more importantly, gross margins. In this
 environment, expense reduction is critical to the generation of
 higher profits. Kmart's innovative application of state-of-the-art
 technology continues to help us reduce costs throughout the
 organization."
 The selling, general and administrative (SGA) expense ratio was 0.6%
 lower at 20.6% of sales in 1992, versus 21.2% of sales for 1991, as
 a result of the effectiveness of cost control programs primarily at
 the Kmart store division and reduced advertising expense.
 "Our Kmart store opening, relocation, enlargement and refurbishment
 program progressed on schedule in 1992," said Antonini. "Last year,
 448 projects were completed. At 1992 year end, including 448 stores
 completed in 1992, 1,130 stores had the updated look, representing
 50% of our U.S. Kmart stores. Customer acceptance of the layouts,
 fixturing and new merchandising assortments has been very good. The
 planned improvement in these updated stores is being realized."
 "Kmart's Specialty Retail Group made excellent progress in 1992.
 The Specialty Retail Group contributed $11.3 billion in sales and
 $254 million in operating profits, compared with $9.0 billion in
 sales and $245 million in operating profits in 1991. All of the
 businesses had an outstanding year with the exception of PACE
 Membership Warehouse, which experienced a substantial decline in
 profits. The erosion of profitability was primarily the result of
 poor performance of warehouses opened during 1992 and 1991 and a
 general warehouse industry softness during the second half of 1992.
 We anticipate improvement in results at PACE as 1993 progresses and
 look for continuing gains in the other businesses in the current
 year. But more importantly for the long term, we have developed a
 portfolio of high-volume, low-cost and low-price retail businesses
 outside our core discount store division that will continue to
 provide excellent growth opportunities for Kmart."
 "There are clear signs now that the economic environment is
 strengthening which is resulting in an upturn in consumer spending.
 Kmart's renewal program, pricing leadership, heavy capital
 investment in retail automation and continued expansion of our
 specialty retail formats are effectively positioning Kmart to
 participate in the anticipated improvement 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, Canada, the
 Czech Republic and Slovakia. Kmart, currently operating 2,409 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 JANUARY 27, 1993 AND JANUARY 29, 1992
 SALES
 % Change
 All Comparable
 (Millions U.S. $) 1-27-93 1-29-92 Stores Stores
 General Merchandise
 United States $ 7,683 $ 7,514 2.3 0.3
 International 412 343 20.1 5.9(b)
 Total General Merchandise 8,095 7,857 3.0 0.6
 Specialty Retail
 PACE Membership Warehouse 1,283 1,097 16.9 0.7
 Builders Square 553 456 21.0 7.9
 PayLess Drug Stores 747 580 28.9 (1.7)
 Waldenbooks 407 414 (1.8) (0.3)
 The Sports Authority 141 91 55.6 5.2
 OfficeMax(a) 192 65 ---- 26.7(a)
 Borders(a) 56 --- ---- 12.6(a)
 Total Specialty Retail 3,379 2,703 25.0 2.3(a)
 Total Kmart $11,474 $10,560 8.7 1.0(a)
 OPERATING INCOME
 (Millions U.S. $) 1-27-93 1-29-92 % Change
 General Merchandise
 United States $ 716 $ 635 12.7
 International 29 11 ----
 Total General Merchandise 745 646 15.3
 Specialty Retail
 PACE Membership Warehouse 7 17 (57.1)
 Builders Square 18 18 4.6
 PayLess Drug Stores 50 37 36.1
 Waldenbooks 59 57 2.5
 The Sports Authority 8 5 61.5
 OfficeMax(a) 6 1 ----
 Borders(a) 4 --- ----
 Total Specialty Retail 152 135 12.5
 Total Kmart $ 897 $ 781 14.8
 (a) OfficeMax was acquired in November 1991. On a proforma basis,
 total sales increased 131.1% and comparable store sales were up
 26.7%. Borders was acquired in November 1992. On a proforma basis,
 total sales increased 47.4% and comparable store sales were up
 12.6%. Excluding OfficeMax prior to November 22, 1992 and Borders,
 the comparable store sales increases for Total Specialty Retail and
 Total Kmart were 2.0% and 0.9%, respectively.
 (b) International Comparable Store Sales Change is calculated on
 sales in the applicable local currency.
 KMART CORPORATION
 SALES AND OPERATING INCOME BY BUSINESS
 52 WEEKS ENDED JANUARY 27, 1993 AND JANUARY 29, 1992
 SALES
 % Change
 All Comparable
 (Millions U.S. $) 1-27-93 1-29-92 Stores Stores
 General Merchandise
 United States $25,326 $24,488 3.4 1.5
 International 1,144 1,060 8.0 0.7(b)
 Total General Merchandise 26,470 25,548 3.6 1.5
 Specialty Retail
 PACE Membership Warehouse 4,358 3,646 19.5 6.7
 Builders Square 2,419 2,049 18.1 8.5
 PayLess Drug Stores 2,335 1,892 23.4 0.0
 Waldenbooks 1,146 1,139 0.6 1.4
 The Sports Authority 412 241 70.8 8.3
 OfficeMax(a) 528 65 ---- 28.5(a)
 Borders(a) 56 --- ---- 12.6(a)
 Total Specialty Retail 11,254 9,032 24.6 5.7(a)
 Total Kmart $37,724 $34,580 9.1 2.6(a)
 OPERATING INCOME
 (Millions U.S. $) 1-27-93 1-29-92 % Change
 General Merchandise
 United States $ 1,511 $ 1,367 10.5
 International 46 23 ----
 Total General Merchandise 1,557 1,390 11.9
 Specialty Retail
 PACE Membership Warehouse 3 39 ----
 Builders Square 81 74 8.6
 PayLess Drug Stores 113 90 26.4
 Waldenbooks 43 38 13.3
 The Sports Authority 10 3 ----
 OfficeMax(a) 1 1 ----
 Borders(a) 3 --- ----
 Total Specialty Retail 254 245 3.8
 Total Kmart $ 1,811 $ 1,635 10.7
 (a) OfficeMax was acquired in November 1991. On a proforma basis,
 total sales increased 115.8% and comparable store sales were up
 28.5%. Borders was acquired in November 1992. On a proforma basis,
 total sales increased 47.4% and comparable store sales were up
 12.6%. Excluding OfficeMax prior to November 22, 1992 and Borders,
 the comparable store sales increases for Total Specialty Retail and
 Total Kmart were 5.2% and 2.4%, respectively.
 (b) International Comparable Store Sales Change is calculated on
 sales in the applicable local currency.
 %
 13 Weeks Ended Inc.
 (Millions U.S. $) 1-27-93 1-29-92 (Dec.)
 Sales $11,474 $10,560 8.7
 Licensee fees and
 other income 167 158 6.0
 Gross revenue 11,641 10,718 8.6
 Cost of merchandise sold 8,578 7,893 8.7
 Selling, general and
 administrative expenses 2,140 2,004 6.8
 Interest - net
 Debt 62 49 26.1
 Capital leases 50 47 8.2
 Income before income taxes 811 725 11.8
 Income taxes 276 246 12.2
 Net Income $ 535 $ 479 11.7
 Earnings per common and
 common equivalent share $ 1.15 $ 1.06 8.5
 Weighted average shares 463.6 453.5
 %
 52 Weeks Ended Inc.
 (Millions U.S. $) 1-27-93 1-29-92 (Dec.)
 Sales $37,724 $34,580 9.1
 Licensee fees and
 other income 400 389 2.8
 Gross revenue 38,124 34,969 9.0
 Cost of merchandise sold 28,485 25,930 9.9
 Selling, general and
 administrative expenses 7,781 7,337 6.1
 Interest - net
 Debt 244 219 11.7
 Capital leases 188 182 3.2
 Income before income taxes 1,426 1,301 9.6
 Income taxes 485 442 9.7
 Net Income $ 941 $ 859 9.5
 Earnings per common and
 common equivalent share $ 2.06 $ 2.02 2.0
 Weighted average shares 457.8 426.2
 Per-share amounts and weighted average shares have been adjusted to
 reflect the 2-for-1 stock split distributed June 5, 1992.
 -0- 3/2/93
 /CONTACT: Orren F. Knauer or Lois M. Connelly of Kmart Investor Relations, 313-643-1040/
 (KM)


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

ML -- DE002 -- 1770 03/02/93 08:47 EST
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Date:Mar 2, 1993
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