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SERVICE MERCHANDISE COMPANY, INC. ANNOUNCES THIRD QUARTER RESULTS

 SERVICE MERCHANDISE COMPANY, INC. ANNOUNCES THIRD QUARTER RESULTS
 NASHVILLE, Tenn., Oct. 8 /PRNewswire/ -- Service Merchandise Company, Inc. (NYSE: SME) today announced results for the third quarter ended Sept. 30, 1992.
 Third Quarter Ended Sept. 30, 1992
 Net sales for the third quarter of 1992 were $698,214,000 compared to $656,437,000 for the third quarter of 1991, an increase of $41,777,000 or 6.4 percent. Comparable store sales increased 2.6 percent for the quarter. The Company has added a net of 12 stores since the third quarter of last year.
 The net loss for the three months ended Sept. 30, 1992 was $1,718,000 or $.02 per share compared to a net loss of $4,730,000 or $.05 per share for the same quarter last year.
 Gross margin for the third quarter of 1992, after taking into account buying and occupancy expense, was $169,911,000 as compared to $161,346,000 for the same quarter last year. As a percentage of net sales, gross margin, after taking into account buying and occupancy expense, was 24.3 percent as compared to 24.6 percent for the third quarter of 1991. The decrease in margin rate reflected lower jewelry and hardline margins, the result of more aggressive pricing of promotional items.
 Selling, general and administrative expenses as a percentage of net sales decreased to 19.4 percent for the third quarter of 1992 from 19.5 percent for the third quarter of 1991. This improvement was attributable to the Company's continued control of all expense categories.
 Interest expense on debt and capitalized leases decreased $4,197,000 or 15.1 percent as compared to the third quarter of 1991. The lower interest expense was due to the favorable impact of reduced interest rates and the reduction of recapitalization debt.
 Nine Months Ended Sept. 30, 1992
 Sales for the nine months ended Sept. 30, 1992 were $2,144,365,000 an increase of 6.6 percent over sales of $2,011,941,000 a year ago. Comparable store sales increased 2.7 percent for the first nine months of 1992.
 The net loss for the nine month period ended Sept. 30, 1992, was $5,075,000 or $.05 per share, compared to a net loss of $12,590,000 or $.13 per share for the same period a year ago.
 During the third quarter of 1992, the Company opened one of two test specialty children's stores, Kids Central USA, in McAllen, Texas. The second store is scheduled to open during the fourth quarter in Nashville, Tennessee. The concept features complete selections of juvenile furniture, apparel, toys and accessories for infants and children through age five.
 Raymond Zimmerman, President and Chairman of the Board, stated, "The net loss of $1,718,000, or $.02 per share for the third quarter of 1992 is an improvement of 63.7 percent over the same period of 1991. These improved results reflect the benefit of reduced interest rates and recapitalization debt, improved sales resulting from more aggressive pricing and continued expense control."
 Service Merchandise Company, Inc. "America's Leading Jeweler," operates 365 catalog stores and one Kids Central USA store in 37 states.
 SERVICE MERCHANDISE COMAPNY, INC. (N)
 (in thousands except per share data)
 Three Months Ended Nine Months Ended
 9/30/92 9/30/91 9/30/92 9/30/91
 Net Sales $698,214 $656,437 $2,144,365 $2,011,941
 Net Loss ($1,718) ($4,730) ($5,075) ($12,590)
 Loss Per Share (A) ($0.02) ($0.05) ($0.05) ($0.13)
 Weighted Average
 Common Shares and
 Common Share
 Equivalents
 Outstanding (A) 101,633 101,102 101,477 100,329
 Comparable Store
 Sales increase 2.6 pct. 2.7 pct.
 (A) All per share data has been restated to reflect the three-for- two common stock split effected in the form of a 50 percent stock dividend in May 1992.
 -0- 10/8/92
 /CONTACT: S.P. Braud, Corporate Vice President-Treasurer-CFO, Service Merchandise Company, Inc., 615-660-3300/
 (SME) CO: Service Merchandise Company, Inc. ST: Tennessee IN: REA SU: ERN


SB-CM -- CH012 -- 8045 10/08/92 16:21 EDT
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Date:Oct 8, 1992
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