Kmart Posts First Post-Bankruptcy Profit

TROY, Mich. - Kmart Holdings Corp. here today posted its first quarterly profit since emerging from bankruptcy, although its same-store sales continue to slide.

Kmart said it earned $276 million, or $2.78 per share, in the fourth quarter ended Jan. 28, compared with a loss of $1.1 billion a year earlier.

Kmart filed for Chapter 11 bankruptcy protection in January 2002 and emerged in May 2003 after realigning management and closing 600 stores. In January Kmart said that it recorded a profit in November and December, which it said could put it on track to post its first quarterly profit since exiting bankruptcy.

Total sales dropped 25.8 percent to $6.3 billion, in part because of store closings. Same-store sales dropped 13.5 percent.

Kmart has been holding back on price cuts to preserve profits. The retailer listed about $2.1 billion in cash and cash equivalents as of Jan. 28, more than expected.

The company has also been reducing inventory and cleaning up stores, which critics said had looked cluttered before and during bankruptcy.
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