Kmart in the Money

Kmart Holding Corp. (Troy, Mich.) reported strong profitability and cash generation for the two-month period ending Dec. 29, 2004. During that same period, Kmart said its same-store sales “evidenced a significant moderation in the rate of decline.”

The mass-merchandising retailer said it expects to generate net income of approximately $250 million for November and December, a 10 percent increase over the same period in 2003. Same-store sales for November and December declined by 4.6 percent — 2.6 percent in December alone. But the retailer noted that this represents “a significant improvement” on the trends from earlier in 2004.

“We are pleased with the significant improvement in the rate of our same store sales decline,” said ceo Aylwin Lewis. “As we have discussed before, Kmart has taken actions on many fronts to reset baseline sales at a level that forms the basis for profitable growth. It is our intention to maintain a substantial base of sales and be significantly profitable at the same time, and we are pleased with our progress to date. We are implementing numerous initiatives to grow sales and increase profits in 2005.”

Kmart expects the proposed merger with Sears, Roebuck & Co. (Hoffman Estates, Ill.) to close by early March 2005.

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