Kmart Corp. reported Tuesday it lost $99 million in the first quarter, suffering large costs related to selling most of its stake in the Thrifty PayLess Holdings Inc. drug store chain.
The loss for the quarter ended May 1 amounted to 21 cents a share, compared with a loss of $28 million, or 6 cents a share, in the first quarter of 1995.Sales were up nearly 2 percent at $7.58 billion, compared with $7.44 billion last year. The nation's No. 3 retailer said sales were hurt by having fewer stores and by cold weather during the quarter.
Kmart's loss was widened by $61 million, or 13 cents a share, due to the Thrifty Payless sale and the re-evaluation of its remaining holdings in the chain.
Without the charge, Kmart would have lost $38 million, or 8 cents a share.
The results were slightly better than Wall Street expected, said L. Wayne Hood, a retail analyst with Prudential Securities Inc. in Atlanta.
The company's stock was up 121/2 cents at $10.25 a share this morning on the New York Stock Exchange.
Chairman Floyd Hall said Kmart made improvements in cutting expenses, largely through the closing of unproductive stores and the sale of its auto service business.
Analyst Ron Petrie of Roney & Co. in Detroit said he expects Kmart to make a comeback later this year.
"They have obviously been focusing on improvement as much as anybody in the industry in the last year," he said. "I think they're going to surprise people this year."
Kmart has been struggling for years against more efficient discounters, such as No. 1 Wal-Mart Stores Inc. and the Target chain of Dayton Hudson Corp. In a drastic cost-cutting program, Kmart closed hundreds of stores, laid off thousands of employees and sold most of its subsidiaries in the past few years.
Troy, Mich.-based Kmart has 2,159 discount stores and 167 Builders Square home-improvement stores in the United States, as well as 134 discount stores overseas. It is the nation's third-largest retailer behind Wal-Mart and Sears.