The Troy, Michigan-based retailer said it earned $276 million, or $2.78 per share, in the fourth quarter ended Jan. 28, compared with a loss of $1.1 billion a year earlier. .
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Kmart filed for Chapter 11 bankruptcy protection in January 2002 after a poor holiday shopping season compounded its financial woes. It emerged in May 2003 with a new management team, 600 fewer stores and much lower debt. The retailer had said in January that it recorded a profit in November and December, which could put it on track to post its first quarterly profit since exiting bankruptcy. .
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Total sales dropped 25.8 percent to $6.3 billion, in part because of store closings. Sales at stores open at least a year — a key retail measure known as same-store sales — dropped 13.5 percent. .
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Kmart has been holding back on price cuts to preserve profits. The retailer listed about $2.1 billion in cash and cash equivalents as of Jan. 28, more than expected. .
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The company has also been reducing inventory and cleaning up stores, which critics said had looked cluttered before and during bankruptcy. Kmart faces fierce competition from Wal-Mart Stores Inc. and Target Corp., and some analysts have questioned whether the retailer has a place in a discount sector dominated by those two powerhouses. .
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Kmart is banking on its exclusive brands such as Martha Stewart. Everyday and Joe Boxer to keep customers coming in. .
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Stewart recent conviction for lying to investigators over a suspicious stock sale cast a huge shadow over her long-running relationship with Kmart. The retailer made no comment about Stewart on Thursday, and previously said only that it was saddened by the verdict.
Date:3/18/2004
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