Mixed Bag

Kmart Holding Corp. (Troy, Mich.) reported it was profitable for the first quarter of fiscal 2004. For the 13 weeks ended April 28, 2004, Kmart reported income of $93 million. (In comparison, Kmart Corp., the predecessor company, had reported a net loss of $862 million during the same period last year.)

However, same-store sales dropped 12.9 percent and total sales decreased 25.3 percent, compared to the same period last year.

The company attributed the drop in same-store sales to several company-wide promotional events that were held during the first quarter of 2003, as well as a reduction in advertising, including the frequency of the mid-week circulars in 2004. The decrease in total sales is linked to the decrease in same-store sales and the closure of 316 stores in the first quarter of 2003.

“We are delighted with the progress we've made in our business,” said Julian Day, Kmart president and ceo. “For the fourth consecutive quarter, we have reported improved year-over-year profitability and liquidity through our consistent approach of focusing on profitable sales with an improved gross margin rate, reducing operating costs through operational execution and working to improve the productivity of our assets. These initiatives, together with a renewed focus on communicating the benefits of the Kmart shopping experience to our customers, will continue to characterize our approach going forward.”

Kmart operates more than 1500 stores in 49 states.