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Kmart Nets $93 Million for First Quarter
TROY, Mich. -- Kmart Holding Corp. reports net income of $93 million, or 94 cents per diluted share, for the first quarter of fiscal 2004. Kmart Corp., the predecessor company, reported a net loss of $862 million for the same quarter in fiscal 2003.Operating income for the 13 weeks ended April 28 was $165 million, or 3.6% of sales, as compared to a loss of $39 million, or negative 0.6% of sales, for the same period in 2003. The improvement was primarily due to the decrease in selling, general and administrative expenses and the improvement in gross margin rate, partially offset by an overall decline in gross margin dollars due to a reduced store base.Kmart has a number of stores throughout the Mahoning and Shenango valley region and operates a distribution center in Bazetta Township.Operating income was also impacted by net gains on sales of assets of $32 million in the current quarter, and restructuring, impairment and other charges of $37 million in the same period in 2003. Same-store sales and total sales decreased 12.9% and 25.3%, respectively, for the 13 weeks ended April 28 compared to the year-ago period. "For the fourth consecutive fiscal quarter, we have reported improved year-over-year profitability and liquidity through our consistent approach of focusing on profitable sales with an improved gross margin rate, reducing operating costs through operational execution, and working to improve the productivity of our assets," comments Julian C. Day, Kmart president and chief executive officer. "These initiatives, together with a renewed focus on communicating the benefits of the Kmart shopping experience to our customers, will continue to characterize our approach going forward."Our focus on the productivity of our asset base, exemplified by the diligent management of our inventories which ended the quarter at $3.4 billion, a reduction of over 23% from the prior year, has been a primary element of our improved liquidity position," Day continues. "We apply similar rigor to managing the productivity of our capital assets, focusing on the need to allocate those assets to their best use. Given our success, Kmart today is a financially strong company."As of April 28, Kmart had approximately $2.2 billion in cash and cash equivalents.Kmart Corp. emerged from bankruptcy on May 6, 2003. Kmart Holding Corp. is a mass merchandising company that operates more than 1,500 stores in 49 states."