May 12, 1999
Robert M. Burton
Shawn M. Kahle
KMART CORPORATION 1999 FIRST QUARTER NET INCOME REACHES $67 MILLION, A 43 PERCENT INCREASE
TROY, Mich., May 12, 1999--Kmart Corporation (NYSE:KM) today reported net income of $67 million, or $0.14 earnings per share for the 13 weeks ended April 28, 1999, compared with net income of $47 million, or $0.10 per share for the 13 weeks ended April 29, 1998.
Total consolidated sales in the first quarter of 1999 were $8.144 billion, an increase of 8.4% from $7.515 billion for the first quarter of 1998. Comparable sales for the quarter increased 6.5%. The gross margin rate for the quarter was 21.2% of sales versus 21.4% last year. Selling, general and administrative (SG&A) expenses for the quarter were $1.541 billion compared with $1.449 billion for 1998, resulting in a SG&A to sales ratio of 18.9% for 1999 versus 19.3% for 1998.
"Kmart's performance continues to gain momentum, with 12 consecutive quarters of improved earnings," said Floyd Hall, Chairman, President and CEO. "Comparable sales growth was ahead of expectations for the quarter, while total sales increased at the highest rate in four years. The keys to Kmart's continued improvement were the successful performance of our 1,377 recently refurbished Big Kmart stores, and the strong results turned in by our exclusive private label merchandise, including Martha Stewart Everyday home fashions, Route 66 apparel and accessories, as well as Jaclyn Smith and Kathy Ireland ladies apparel."
Kmart Corporation serves America with 2,161 Kmart retail outlets. Kmart Corporation common stock is listed on the New York, Pacific, and Chicago Stock Exchanges.
KMART CORPORATION CONSOLIDATED STATEMENTS OF EARNINGS
Divisional Vice President, Investor Relations
(248) 643-1040
Vice President, Corporate Affairs
(248) 637-4201
|
(Amounts in millions, except per share data) |
13 Weeks |
13 Weeks |
|
Sales |
$ 8,144 |
$ 7,515 |
|
Cost of sales, buying and occupancy |
6,417 |
5,908 |
|
Gross margin |
1,727 |
1,607 |
|
Selling, general and administrative expenses |
1,541 |
1,449 |
|
Income before interest, income taxes and dividends on convertible preferred securities |
186 |
158 |
|
Interest expense, net |
66 |
74 |
|
Income tax provision |
40 |
24 |
|
Dividends on convertible preferred securities, net of income taxes |
13 |
13 |
|
Net income |
$ 67 |
$ 47 |
|
Basic earnings per common share |
$ 0.14 |
$ 0.10 |
|
Diluted earnings per common share |
$ 0.14 |
$ 0.10 |
|
Basic weighted average shares outstanding |
494.1 |
489.7 |
|
Diluted weighted average shares outstanding |
567.1 |
562.3 |
KMART CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(Amounts in millions, except per share data) |
13 Weeks |
13 Weeks |
||
|
Cash Flow From Operating Activities: |
||||
|
Net income |
$ 67 |
$ 47 |
||
|
Adjustments to reconcile net income to net cash used for operating activities: |
||||
| Cash used for store restructuring and other charges |
(24) |
(24) |
||
|
Depreciation and amortization |
186 |
165 |
||
|
Increase in inventories |
(909) |
(517) |
||
|
Increase in accounts payable |
993 |
666 |
||
|
Increase in accounts receivable |
(49) |
(49) |
||
|
Deferred income taxes and taxes payable |
(8) |
53 |
||
|
Decrease in other long-term liabilities |
(17) |
3 |
||
|
Changes in certain assets and liabilities |
(12) |
(32) |
||
|
Net cash provided by operating activities |
227 |
312 |
||
|
Cash Flow From Investing Activities: |
||||
|
Acquistion of leases |
(76) |
- |
||
|
Proceeds from divestitures |
- |
87 |
||
|
Increase in property held for sale or financing and other |
(6) |
(2) |
||
|
Capital expenditures |
(227) |
(145) |
||
|
Other, net |
- |
(5) |
||
|
Net cash used for investing activities |
(309) |
(65) |
||
|
Cash Flow From Financing Activities: |
||||
|
Change in common stock |
18 |
39 |
||
|
Payments on capital lease obligations |
(18) |
(21) |
||
|
Payments on long-term debt |
(9) |
(30) |
||
|
Net cash used for financing activities |
(9) |
(12) |
||
|
Net change in cash and equivalents: |
(91) |
235 |
||
|
Cash and equivalents at beginning of year |
710 |
498 |
||
|
Cash and equivalents at end of period |
$ 619 |
$ 733 |
||
KMART CORPORATION
CONSOLIDATED BALANCE SHEETS
|
(Amounts in millions) |
4-28-99 |
4-28-98 |
|||
|
ASSETS |
|||||
|
Current Assets: |
|||||
|
Cash and equivalents |
$ 619 |
$ 733 |
|||
|
Merchandise inventories |
7,445 |
6,884 |
|||
|
Other current assets |
657 |
643 |
|||
|
Total current assets |
8,721 |
8,260 |
|||
|
Property and equipment, net |
5,965 |
5,558 |
|||
|
Other assets and deferred charges |
441 |
433 |
|||
|
TOTAL ASSETS |
$ 15,127 |
$ 14,251 |
|||
|
LIABILITIES AND EQUITY |
|||||
|
Current Liabilities: |
|||||
|
Long-term debt due within one year |
$ 77 |
$ 77 |
|||
|
Trade accounts payable |
3,040 |
2,589 |
|||
|
Accrued payrolls and other liabilities |
1,243 |
1,034 |
|||
|
Taxes other than income taxes |
245 |
227 |
|||
|
Total current liabilities |
4,605 |
3,927 |
|||
|
Long-term debt and notes payable |
1,529 |
1,696 |
|||
|
Capital lease obligations |
1,073 |
1,158 |
|||
|
Other long-term liabilities |
866 |
968 |
|||
|
Convertible preferred securities, net |
985 |
982 |
|||
|
Common stock |
495 |
492 |
|||
|
Capital in excess of par value |
1,688 |
1,641 |
|||
|
Retained earnings |
3,886 |
3,387 |
|||
|
TOTAL LIABILITIES AND EQUITY |
$ 15,127 |
$ 14,251 |
|||
 |