Kmart says profitability, cash generation improved in November, December
Monday, January 3rd 2005, 11:11 am
By: News On 6
DETROIT (AP) _ Kmart Holding Corp. said Monday that it had strong profitability and cash generation in November and December as the discount retailer's decline in same-store sales moderated.
Kmart expects net income, excluding any asset sales and bankruptcy-related expenses, to be about $250 million for the two-month period. The company said that would be an increase of about $23 million, or 10 percent, from the same period in 2003.
``Kmart has taken actions on many fronts to reset baseline sales at a level that forms the basis for profitable growth,'' Kmart's chief executive Aylwin Lewis said in a statement. ``It is our intention to maintain a substantial base of sales and be significantly profitable at the same time.''
Kmart's fiscal fourth quarter of 2004 ends Jan. 26. The Troy-based company has posted four straight quarterly profits, but same-store sales, or sales at stores opened at least a year, have continued to decline. Same-store sales are often considered the best indicator of a retailer's health.
Same-store sales for November and December declined by 4.6 percent, with December same-store sales down about 2.6 percent. But Kmart said this represents an improvement on the trends from earlier in the year.
In its fiscal third quarter, for example, Kmart's same-store sales were down 12.8 percent from the same period in 2003.
``We are pleased with the significant improvement in the rate of our same-store sales decline,'' Lewis said.
In late-morning trading on the Nasdaq Stock Market, shares of Kmart were up $1.65, or 1.67 percent, at $100.60.
Kmart Corp. emerged from Chapter 11 bankruptcy protection in May 2003 as Kmart Holding Corp. In November, Kmart announced plans to buy the once-dominant Sears, Roebuck and Co. department store chain in an $11 billion deal.
Kmart expects the deal with Sears to close by early March. The new company, Sears Holdings Corp., will be based in the northwestern Chicago suburb of Hoffman Estates, where Sears has its headquarters.
Kmart said it had about $3.9 billion in cash at the end of December and is expected to have about $3.2 billion at the end of its 2004 fiscal year, compared with $2.1 billion at the end of fiscal 2003.