Byline: Dan Burrows / Evan Clark

NEW YORK — ShopKo Stores returned to profitability in the fourth quarter and year, but the sluggish performance of its Pamida division prevented it from achieving its own fiscal targets.
For the 13-week quarter ended Feb. 2, the company reported net income of $34.9 million, or $1.21 a diluted share, compared with a net loss of $47.3 million, or $1.65, in the 14-week, year-ago period. Excluding restructuring and other charges, the company would have earned $29.8 million, or $1.04 a share, in the year-ago period.
Total revenues declined 11.5 percent to $1.01 billion from $1.14 billion in last year’s fourth quarter.
While the ShopKo division saw same-store sales inch up 0.1 percent, the Pamida division’s comps fell 0.2 percent. Moreover, Pamida reported a 9.4 percent sales drop to $234.3 million from $258.6 million last year.
The Green Bay, Wis.-based discounter entered 2001 on the heels of a strategic corporate restructuring in which it closed 23 stores in the first quarter and shed $203.3 million in debt over the fiscal year.
“While we fell short of our initial operating performance targets, due in part to a difficult economic environment and underperformance at our Pamida division, we achieved and in some cases exceeded a number of critical financial objectives for the year, resulting in improved liquidity,” said chief executive officer William Podany on a conference call with analysts.
In addition to reducing debt, other key improvements resulting from the restructuring included a 100-basis-point reduction in consolidated selling, general and administrative expenses, and a 10.4 percent drop in inventory, all of which accrued to ShopKo’s Wall Street credibility.
Overall, in fiscal 2001, ShopKo reported net income of $28.2 million, or 98 cents a diluted share, compared with a net loss of $15.8 million, or 55 cents, in fiscal 2000. Excluding special charges and gains, year-ago earnings would have reached $31.5 million, or $1.09 a share, leaving the firm with a 10.5 percent drop in profits for the most recent year. Sales slipped 4.1 percent to $3.39 billion from $3.53 billion.
ShopKo expects a first-quarter loss in the range of 9 to 14 cents, eventually rebounding to post earnings per share of $1.05 to $1.25 for the year.
Among the other mass merchants reporting results last week:
Ross Stores Inc.’s fourth-quarter profits charged ahead with a double-digit increase as the off-pricer’s value emphasis appealed to recession-addled consumers.
Earnings for the quarter managed to outpace sales, climbing 10.4 percent to $50 million, or 62 cents a diluted share, compared with year-ago profits of $45.2 million, or 56 cents. Results were in line with the firm’s earlier projections and Wall Street’s estimates of 62 cents a share.
Sales for the period ended Feb. 2 strengthened 8.9 percent to $848.4 million from $779.1 million a year ago. Comparable-store revenues jumped 8 percent.
Chief executive Michael Balmuth, in a statement, attributed the firm’s three consecutive quarters of comp and earnings-per-share growth to rebalanced merchandise assortments and several other initiatives.
Strongest merchandise categories in 2001 were juniors, home and children’s.
For the year, profits inched up 2.2 percent to $155 million, or $1.91 a diluted share, from $151.8 million, or $1.82, last year. Sales for the 12 months climbed 10.2 percent to $2.99 billion from $2.71 billion a year ago. Comps rose 3 percent.
The Newark, Calif.-based off-pricer expanded its retail footprint by 11 percent in 2001 with a net of 43 new stores, making for 452 locations at the end of the year. This year, growth is expected to come in at 11 to 12 percent, with 50 to 55 new doors.
At One Price Clothing Stores, an already difficult year ended in disappointment.
The company reported a fourth-quarter net loss of $7.8 million, or $2.65 a diluted share, compared with a net loss of $2.9 million, or 98 cents, in the year-ago period. Excluding noncash charges of $4.6 million related to the recording of a valuation allowance against deferred income tax assets, One Price would have posted a mitigated net loss of $3.2 million, or 98 cents.
Sales for the three-months ended Feb. 2 wilted 8.1 percent to $83.2 million from $90.6 million last year. Comp-store sales for the quarter rose 0.8 percent.
The Duncan, S.C.-based off-price specialty retailer, which operates 622 stores, spent much of the year repositioning itself for future growth.
“During the year, we closed the balance of the 42 underperforming stores identified for closing in the restructuring plan announced in Jan. 2001,” said chief executive officer Leonard Snyder in a statement.
In another bright spot, One Price recorded increases in gross margins as a percent of sales of 40 basis points in the quarter, and 20 basis points for the fiscal year.
Overall, in fiscal 2001, the company reported a net loss of $19.7 million, or $6.70 a diluted share, compared with a net loss of $5.4 million, or $1.80, in fiscal 2000. Sales for the fiscal year declined 4.3 percent to $340.4 million from $355.6 million last year. Same-store sales fell 1.9 percent.

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