Robert M. Burton
Divisional Vice President, Investor Relations
(248) 643-1040

Shawn M. Kahle
Vice President, Corporate Affairs
(248) 637-4201

KMART CORPORATION REPORTS JUNE SALES RESULTS;
COMMENTS ON EARNINGS OUTLOOK FOR SECOND QUARTER

TROY, Mich., July 9, 1997--Kmart Corporation (NYSE: KM) today reported total consolidated sales increased 3.5% to $3.142 billion for the five week period ended July 2, 1997, compared with $3.037 billion for the same period last year. On a comparable store basis, consolidated sales increased 5.3%. Consolidated results exclude sales of the discontinued Builders Square operations.

Sales from consolidated operations for the 22 weeks ended July 2, 1997 were $12.887 billion, up 3.6% from $12.443 billion for the first 22 weeks of 1996. On a comparable store basis, consolidated sales rose 5.0%.

"Kmart’s sales for the month were on plan and we are pleased with our progress in a number of key businesses, " said Floyd Hall, Chairman, President, and CEO of Kmart. "Sales of seasonal areas such as outdoor furniture, home appliances such as fans and air conditioners, and selected apparel items improved. Our consumables business performed well, aided by the opening of 118 additional Big Kmart conversions, and our Martha Stewart Everyday home fashions continued strong. Other areas showing particular strength for the month included home electronics and housewares, men’s, children’s, and intimate apparel, cosmetics, jewelry, and photography.

"While sales of women’s apparel improved slightly during June, clearance markdowns continue to be significantly higher than plan. As a result, Kmart’s solid performance in other merchandise areas will be more than offset by margin erosion specifically tied to women’s apparel. Currently, we expect that Kmart will report a profitable second quarter, but below last year’s performance.

"Clearly, we are disappointed with the poor performance in the women’s apparel category. We are taking steps to ‘get it right’ in this critical area and are focused on delivering considerably better performance during the second half of the year. We are actively engaged in a search for an apparel senior vice president and general merchandise manager and a divisional vice president for our women’s wear business. We expect to have both positions filled soon."

Kmart Corporation serves America with 2,122 Kmart retail outlets. Kmart Corporation common stock is listed on the New York, Pacific and Chicago Stock Exchanges.