Troy, MI, May 17--Kmart Holding Corp. on Monday posted its second consecutive quarterly profit as it cut costs and pared inventory, reducing clearance sales.
The retailer, which emerged from Chapter 11 bankruptcy protection last May, said it earned $93 million, or 94 cents per share, in the fiscal first quarter ended April 28. For last year's first quarter, Kmart reported a loss of $862 million while it was still in bankruptcy.
The company said quarterly sales tumbled 25.3 percent to $4.62 billion, reflecting the closing of 316 stores in the first quarter last year. The company shut about 600 of its 2,100 stores while in bankruptcy.
Sales at stores open at least 13 months fell 12.9 percent. Kmart blamed the decline on special promotions last year that had boosted sales and reduced advertising this year.
Kmart became the largest retailer to file for bankruptcy in January 2002 after a poor holiday shopping season compounded financial woes. It competes with industry leaders Wal-Mart Stores Inc. and Target Corp., which both posted strong quarterly earnings and sales growth last week.
Kmart has focused on preserving profits rather than boosting sales since emerging from bankruptcy, and has built up a hefty cash stockpile. Kmart said it had about $2.2 billion in cash and cash equivalents as of April 28.
Selling, general and administrative costs fell to $1.0 billion from $1.4 billion a year ago, thanks in part to lower payroll and advertising.
Kmart said gross margin--a measure of profitability--rose to 24.6 percent of sales from 23.0 percent a year earlier because of fewer clearance sales.
Inventories were down more than 23 percent from a year earlier, helping Kmart keep clearance sales and spending down.
