TROY, Mich. -- Kmart Holding Corp. here last week reported a profit for the 13-week second quarter ended July 28, although the company's same-store sales continued to decline in double digits.
weather, and a transition in apparel lines leading up to back-to-school product launches.
The discounter said its margins improved in the period because of reduced markdowns on promotions and clearance items and shrink reduction at warehouses and stores.
Net income was $155 million for the quarter, compared with a loss of $5 million in the year-ago quarter. Sales in the period fell 15.3%, to $4.79 billion, compared with year-ago results. Operating income was $275 million in the period, or 5.7% of sales, compared with $10 million, or 0.2% of sales in the year-ago period. The most recent period included a net gain of $72 million on asset sales.
The company said selling, general and administrative expenses were 21.7% of sales for both the recent and year-ago quarters.
"We are pleased with our continued progress and ability to deliver consistent profit," said Julian Day, president and chief executive officer, in a prepared statement. "We have continued to focus on process changes that simplify the operations of our stores and distribution centers, including improving merchandise flow and lowering inventory levels, which result in lower shrink expense, lower clearance and promotional markdowns and lower payroll expenses."