NEW YORK — Hurt by weaker sales, ShopKo Stores Inc. warned it expects second-quarter and yearend earnings to fall short of Wall Street estimates.
The Green Bay, Wisc.-based discount retailer said it expects second-quarter earnings to be roughly 25 cents a share before special charges and the gain on the recent sale of the ProVantage Health Services subsidiary. Annual earnings are expected to be about $2.55 to $2.67 a share. Consensus estimates had been 36 cents for the quarter and $2.99 for the year.
The company said charges connected with the sale of the ProVantage subsidiary to Merck-Medco for about $222 million are expected to reduce earnings per share 4 cents in the quarter and 10 cents for the full year, exclusive of the effect of the proceeds.
The stock has traded as high as 40 3/4 in the previous 52 weeks, but recorded a 52-week low of 12 1/4 late last month. Shares on Friday were up 1/16 to 14 7/8 on the New York Stock Exchange.
The company posted a 0.4 percent increase in June same-store sales, in line with its projection for flat to slightly positive figures for the month. The company now expects same-store sales for the year to finish ahead 1 to 3 percent. In May, comparable store sales were up approximately 1 percent from last year. June 1999 comps registered a 13.1 percent increase.
ShopKo’s overall sales for the five weeks ended July 1 were $306.6 million, 34.3 percent higher than in the year-ago period, prior to its acquisition of Pamida. The ShopKo division’s sales were $232.0 million, 1.6 percent higher than in the five-week period in 1999. Pamida’s sales for the 2000 period were $74.6 million.
For the 22 weeks ended July 1, the ShopKo unit’s sales were $1.02 billion, 4.4 percent ahead of the year-to-date figures for 1999 and up 1.8 percent on a same-store basis. Pamida’s contribution to revenues so far this year is $305.4 million. Prior-year data wasn’t available for Pamida.
Year-to-date, the company’s retail sales hit $1.3 billion, 35.6 percent of 1999.
William J. Podany, chairman, president and chief executive, blamed the sluggish second-quarter performance on uncertain economic conditions, a rise in gas prices and cool, wet spring weather.
“We are disappointed in second-quarter sales, but we believe the softness is driven by external forces beyond our control, as opposed to weaknesses in our business model,” Podany said in a statement. “In spite of current sales levels, margins remain healthy and expenses and inventories are under control. We are actively managing to the current business trends.”
Shortly after agreeing to sell ProVantage in May, ShopKo acquired the 49-store P.M. Place chain, which is being merged into its Pamida subsidiary, for about $22 million, including assumption of debt.
ShopKo operates 327 retail stores in 22 states, mostly in the Midwest and West.

load comments
blog comments powered by Disqus