S&P UPGRADES KMART
NEW YORK — Is Kmart Corp. on the right path?
Standard & Poor’s apparently thinks so and has upgraded the outlook on Kmart Corp. to “positive” from “stable.”
The rating agency has also affirmed its outstanding rating on the company’s debt.
Though Kmart’s profitability measures remain below those of rivals Wal-Mart and Target, the company has improved its competitive position as with cost-reduction efforts, a store renovation program and product introductions, S&P said.
S&P said the revision is based on Kmart’s ongoing improvements in operating results and credit protection measures during the first eight months of fiscal 1997.
“Solid same-store sales, along with ongoing expense reduction efforts, have continued to bolster Kmart’s operating performance,” the agency said.
S&P’s upgrading affects $6.3 million of Kmart debt, and $1 billion in Kmart convertible securities.
For the six months ended July 31, Kmart’s same-store sales rose 5.6 percent, while selling, general and administrative expenses fell as a percent age of sales and in dollar terms.
Kmart, S&P said, maintained its strong comparable sales trend during the first two months of the third quarter, gaining 6.4 percent in August and rising 3.1 percent in September.