KMART SLASHES DIVIDEND: Kmart Corp. on Tuesday cut its quarterly dividend in half, to 12 cents a share, and said it expects a loss in this year's first quarter. The discounter said the dividend was cut in...
KMART SLASHES DIVIDEND: Kmart Corp. on Tuesday cut its quarterly dividend in half, to 12 cents a share, and said it expects a loss in this year's first quarter. The discounter said the dividend was cut in line with earnings expectations for the year. It noted that while first-quarter cost reductions and sales are on plan, gross margins are below plan. The expected loss will be exclusive of a one-time gain of 14 cents a share from the replacement of a pension plan with a profit sharing plan. The first-quarter loss reflects a previously announced change in the inventory accounting method, which will reduce earnings by an estimated 12 cents a share in the quarter. In the year-ago quarter, Kmart earned 3 cents a share from continuing operations. Kmart said the accounting change will have no impact on the full year's results. Edward Johnson, Johnson Redbook Services, said Kmart's action was justified based on its earnings prospects. He said there is a "50-50 chance" the dividend will be reduced further if Kmart can't show improved profitability. Kmart said it will review the dividend quarterly, taking into account capital needs and earnings, and also noted it was terminating its shareholder rights plan (poison pill) in compliance with a proposal approved at the annual meeting. Kmart stock closed Tuesday at 14 7/8, down 1/2, on the New York Stock Exchange.
LOOKING AT A LOSS: With sales down and markdowns up, Venture Stores Inc. said it expects to report an operating loss in the first quarter, which ends Saturday. The O'Fallon, Mo.-based discounter said the net loss in the period will reflect a $3.6 million charge related to the completion of a remerchandising program, which began late last year. In the year-ago first quarter, Venture reported a profit of $1.2 million, or 3 cents per share. In an announcement late last week, Venture did not specify the size of its expected operating loss in the quarter, but said it would be "substantially below" year-ago profits.
SEARS NAMES FOOTWEAR VP: William A. Giovanello, a former senior vice president and general merchandise manager of Lazarus Department Stores, has been named divisional vice president of footwear at Sears, effective May 15. He succeeds Martin Gershik, who left Sears to join Woolworth Corp. this month as vice president and general merchandise manager of its Kinney shoe-store chain. Giovanello was responsible for women's accessories, cosmetics, intimate apparel and men's and women's shoes at Lazarus' 48 stores. He will be responsible for men's, women's and children's footwear at Sears. He reports to Jack Guze, group vice president and general merchandise manager of men's and children's apparel and family footwear.
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