Kmart's Third Quarter Net Sales Decrease 2.2%
TROY, Mich. - Kmart Corporation announced today that for the 13-week quarter ended October 31, 2001, net sales were $8.019 billion, a decrease of 2.2% from $8.199 billion for the 13-week period ended October 25, 2000.
Same-store sales decreased 1.5% in the third quarter of fiscal 2001. The company reported a net loss of $224 million, or $0.45 per share, for the 13-week quarter ended October 31, 2001, versus a net loss of $67 million, or $0.14 per share, for the 13-week period ended October 25, 2000. Excluding non-comparable items, primarily related to the charge of restructuring the supply chain operations, the company's net loss was $127 million, or $0.25 per share, for the third quarter of 2001.
"We continue to work at fixing our core business by being in-stock, pricing competitively and providing an excellent shopping experience for Kmart customers. We have made considerable progress in all of these areas but have a lot more work to do. During this past quarter, we completed all of our store resets, launched BlueLight Always everyday low pricing for our frequency categories and installed self-checkout registers in more than 1,000 stores," said Chuck Conaway, chairman and CEO of Kmart Corporation.
Gross margin for the third quarter of 2001 was 20.6% of sales, compared to 20.5% last year, excluding non-comparable items. The increase in gross margin is due to lower food and consumable distribution costs under the company's arrangement with Fleming and the reduction of shrink, which offset the increase in sales of high frequency categories, which carry a lower margin rate. In addition, the reductions in promotional and clearance markdowns offset the price reductions attributable to the BlueLight Always program. Selling, general and administrative expense as a percentage of sales, was 21.6% in the third quarter of 2001 versus 20.8% in the same quarter in 2000, excluding non-comparable items. The increase was due primarily to additional investment in store labor that Kmart committed to last year to enhance customer service.
The third quarter 2001 results include a charge of $148 million ($94 million after tax) related to the restructuring of certain aspects of Kmart's supply chain operations. This restructuring program focuses on the supply chain infrastructure, including the reconfiguration of the distribution center network and implementation of new operating software across the supply chain.
Same-store sales decreased 1.5% in the third quarter of fiscal 2001. The company reported a net loss of $224 million, or $0.45 per share, for the 13-week quarter ended October 31, 2001, versus a net loss of $67 million, or $0.14 per share, for the 13-week period ended October 25, 2000. Excluding non-comparable items, primarily related to the charge of restructuring the supply chain operations, the company's net loss was $127 million, or $0.25 per share, for the third quarter of 2001.
"We continue to work at fixing our core business by being in-stock, pricing competitively and providing an excellent shopping experience for Kmart customers. We have made considerable progress in all of these areas but have a lot more work to do. During this past quarter, we completed all of our store resets, launched BlueLight Always everyday low pricing for our frequency categories and installed self-checkout registers in more than 1,000 stores," said Chuck Conaway, chairman and CEO of Kmart Corporation.
Gross margin for the third quarter of 2001 was 20.6% of sales, compared to 20.5% last year, excluding non-comparable items. The increase in gross margin is due to lower food and consumable distribution costs under the company's arrangement with Fleming and the reduction of shrink, which offset the increase in sales of high frequency categories, which carry a lower margin rate. In addition, the reductions in promotional and clearance markdowns offset the price reductions attributable to the BlueLight Always program. Selling, general and administrative expense as a percentage of sales, was 21.6% in the third quarter of 2001 versus 20.8% in the same quarter in 2000, excluding non-comparable items. The increase was due primarily to additional investment in store labor that Kmart committed to last year to enhance customer service.
The third quarter 2001 results include a charge of $148 million ($94 million after tax) related to the restructuring of certain aspects of Kmart's supply chain operations. This restructuring program focuses on the supply chain infrastructure, including the reconfiguration of the distribution center network and implementation of new operating software across the supply chain.