BRAINTREE, Mass. -- Struck by heavy markdowns, Bradlees Inc. reported earnings slid 10.6 percent in the fourth quarter while sales gained 1.8 percent.

The discounter earned $27.5 million, or $2.44 a share, in the quarter ended Jan. 29, down from $30.8 million, or $2.74 a share, a year earlier. Sales increased to $597.2 million from $586.4 million, and same-store sales were flat.

For the year, the 126-store chain said earnings before special items slumped 46.6 percent to $13.5 million, or $1.19, from $25.3 million, or $2.25, a year earlier. After a $5.2 million charge related to its March 1993 debt refinancing and a $1.5 million charge for an accounting change, net earnings in the latest year were reduced to $6.8 million, or 60 cents a share.

Sales grew 2.7 percent to $1.88 billion from $1.83 billion, while same-store sales inched ahead 1 percent.

"When we recognized that sales in the fourth quarter were not likely to meet our expectations despite promotional efforts, which were even more aggressive than those of the previous year, we took necessary steps to bring our inventories in line," said Barry A. Berman, chairman and chief executive officer. While markdowns depressed margins, inventories at the end of the period were below year-ago levels, he said.

He added that the company implemented a number of cost-cutting measures last year and expects to continue lowering costs in 1994.

Bradlees' target for 1994 is a 1 percent reduction in expenses as a percent of sales, Berman said.

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