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Kmart 2Q loss in line
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August 23, 2001: 8:37 a.m. ET
No. 2 U.S. discount retailer posts narrower loss as sales dip
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NEW YORK (CNNfn) - Kmart Corp. reported a second-quarter loss Thursday in line with Wall Street expectations.
For the latest quarter, Kmart (KM: Research, Estimates) posted a loss before items 4 cents a share compared with a profit of 5 cents a share a year earlier. Analysts on average expected a loss of 4 cents a share, according to earnings tracker First Call.
Including charges related to the company's acquisition of the remaining 40 percent of its e-commerce arm, bluelight.com, Kmart reported a net loss of $95 million, or 19 cents a share, narrower than the net loss of $443 million, or 93 cents a share, a year earlier.
Sales slipped to $8.9 billion from $9 billion.
Kmart's shares tumbled 82 cents to $11.28 in midday trading Thursday.
"We are pleased with our results as we continue our strategies to transform Kmart," CEO Chuck Conaway said.
Kmart has been struggling to stage a turnaround in a slowing economy in the face of stiff competition from discount rivals Wal-Mart Stores Inc. and Target Corp.
The company said it recorded a $92 million, or 15 cents a share, pre-tax charge in the quarter related to the acquisition of the remaining interest in bluelight.com. That's on top of a $740 million restructuring charge in the quarter as the company closed some stores, remodeled others and streamlined inventory.
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Gross margins were essentially flat as were expenses in the quarter, the company said.
"We continue to reduce our reliance on advertising and, with the lowering of prices on 20,000 items as part of our BlueLight Always program, face deflationary pricing conditions," Conaway said.
On Monday, rival Target Corp. (TGT: Research, Estimates) sued Kmart alleging the company made inaccurate price comparisons between the two companies on an in-store advertising campaign. 
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