Troy, Mich., Kmart Holding Co. posted a $309 million profit for the fourth quarter, a 14% increase over the previous year. Same-store sales fell, but the rate of decline was much less than the previous two quarters.
Net income grew to $309 million, or $3.09 per share, from $270 million, or $2.78 per share, a year ago. Excluding gains on sales of assets and bankruptcy-related recoveries, the company posted adjusted profit of $259 million, or $2.59 per share, in the latest period.
Total sales fell to $5.91 billion from $6.33 billion last year. Same-store sales declined 4.5% vs. a decline of 12.8% and 14.9% in the previous two quarters.
Kmart also announced plans to convert approximately 400 Kmart stores to Sears stores over the next three years, after its merger with Sears, Roebuck and Co. is complete. The plans, revealed in a filing with the Securities and Exchange Commission, bode well for the expansion of the new Sears Essentials concept, which is a freestanding, mid-sized format.
In related news, Institutional Shareholder Services (ISS), the nation’s leading independent proxy advisory firm, released a report today that gave a favorable recommendation to the proposed Sears-Kmart merger.
“Based on our review of the terms of the transaction … in particular the reasonable premium received, the reasonable synergy assumptions, the positive market reaction and the improved governance profile, we believe that the merger agreement warrants shareholder support,” ISS stated.