<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
X QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended April 26, 1995
OR
__TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ______________ to _____________
Commission File No. 1-327
KMART CORPORATION
(Exact name of registrant as specified in its charter)
Michigan 38-0729500
(State or other jurisdiction of (I.R.S. Employer)
incorporation or organization Identification No.)
3100 West Big Beaver Road - Troy, Michigan 48084
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (810) 643-1000
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed, by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No_____
As of May 24, 1995, 458,887,858 shares of Common Stock of the Registrant were
outstanding.
1
<PAGE> 2
INDEX
<TABLE>
<CAPTION>
PART I FINANCIAL INFORMATION PAGE
------ --------------------- ----
<S> <C> <C>
Item 1. Financial Statements
Consolidated Statements of Income -- 3
Thirteen weeks ended April 26, 1995 and
April 27, 1994
Consolidated Balance Sheets -- 4
April 26, 1995, April 27, 1994 and
January 25, 1995
Consolidated Statements of Cash Flows -- 5
Thirteen weeks ended April 26, 1995 and
April 27, 1994
Notes to Consolidated Financial 6
Statements
Item 2. Management's Discussion and Analysis of 7
Results of Operations and Financial
Condition
PART II OTHER INFORMATION
------- -----------------
Item 5. Other Information 11
Item 6. Exhibits and Reports on Form 8-K 11
</TABLE>
2
<PAGE> 3
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS:
KMART CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
13 WEEKS ENDED
---------------------
APRIL 26, APRIL 27,
1995 1994
--------- ---------
(Unaudited)
<S> <C> <C>
Sales $ 7,797 $ 7,216
Licensee fees and other income 59 60
-------- --------
7,856 7,276
-------- --------
Cost of merchandise sold (includes buying and occupancy costs) 6,064 5,384
Selling, general and administrative expenses 1,854 1,758
Gain on pension curtailment (124) --
Interest expense:
Debt -- net 54 68
Capital lease obligations and other 55 57
-------- --------
7,903 7,267
-------- --------
Income (loss) from continuing retail operations before income taxes and equity income (47) 9
Equity in net income of unconsolidated companies 5 11
Income taxes (14) 4
-------- --------
Net income (loss) from continuing retail operations (28) 16
Discontinued operations, net of income taxes of $1 -- 2
-------- --------
Net income (loss) $ (28) $ 18
======== ========
Earnings per common and common equivalent share:
Net income (loss) from continuing retail operations $ (.06) $ .03
Discontinued operations, net of income taxes -- .01
-------- --------
$ (.06) $ .04
======== ========
Dividends declared per common share $ .12 $ .24
======== ========
Weighted average shares (millions) 458.8 455.9
======== ========
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
3
<PAGE> 4
KMART CORPORATION
CONSOLIDATED BALANCE SHEETS
(DOLLARS IN MILLIONS)
<TABLE>
<CAPTION>
APRIL 26, APRIL 27, JANUARY 25,
1995 1994 1995
--------- --------- -----------
(Unaudited)
<S> <C> <C> <C>
ASSETS
Current Assets:
Cash (includes temporary investments of $41, $352 and $93,
respectively) $ 379 $ 650 $ 480
Merchandise inventories 7,840 7,815 7,382
Accounts receivable and other current assets 1,583 1,500 1,325
------- ------- -------
Total current assets 9,802 9,965 9,187
Investments in Affiliated Retail Companies 381 599 368
Property and Equipment -- net 6,251 5,972 6,280
Other Assets and Deferred Charges 595 736 910
Goodwill -- net of accumulated amortization of $47, $63 and $45,
respectively 283 691 284
------- ------- -------
$17,312 $17,963 $17,029
======= ======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Long-term debt due within one year $ 84 $ 398 $ 236
Notes payable 1,294 1,134 638
Accounts payable -- trade 3,357 3,097 2,910
Accrued payrolls and other liabilities 1,115 1,240 1,313
Taxes other than income taxes 336 384 272
Income taxes 85 -- 257
------- ------- -------
Total current liabilities 6,271 6,253 5,626
Capital Lease Obligations 1,754 1,764 1,777
Long-Term Debt 1,965 2,224 2,011
Other Long-Term Liabilities (includes store restructuring obligations) 1,367 1,712 1,583
Shareholders' Equity:
Preferred stock, 10,000,000 shares authorized;
Series A, 5,750,000 shares authorized and issued at April 27, 1994 -- 986 --
Series C, 790,287 shares authorized; shares issued 654,815, 784,938
and 658,315, respectively 131 157 132
Common stock, 1,500,000,000 shares authorized; shares issued
464,770,564, 416,669,993 and 464,549,561, respectively 465 417 465
Capital in excess of par value 1,508 541 1,505
Performance restricted stock deferred compensation -- (3) --
Retained earnings 3,989 4,136 4,074
Treasury shares (86) (105) (86)
Foreign currency translation adjustment (52) (119) (58)
------- ------- -------
Total shareholders' equity 5,955 6,010 6,032
------- ------- -------
$17,312 $17,963 $17,029
======= ======= =======
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
4
<PAGE> 5
KMART CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS IN MILLIONS)
<TABLE>
<CAPTION>
13 WEEKS ENDED
---------------------
APRIL 26, APRIL 27,
1995 1994
--------- ---------
(Unaudited)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) from continuing retail operations $ (28) $ 16
Adjustments to reconcile net income (loss) to net cash from operating activities:
Depreciation and amortization 185 190
Deferred income taxes 81 43
Undistributed equity income (5) 27
Decrease in other long-term liabilities (185) (30)
Changes in certain assets and liabilities (348) (178)
------ ------
Net cash provided by (used for) continuing retail operations (300) 68
Net cash used for discontinued operations (18) (253)
------ ------
NET CASH USED FOR OPERATING ACTIVITIES (318) (185)
------ ------
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures -- owned property (149) (237)
Proceeds from sale and divestiture -- net 22 540
Other -- net 14 11
------ ------
NET CASH PROVIDED BY (USED FOR) INVESTING ACTIVITIES (113) 314
------ ------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of long-term debt and notes payable 656 269
Reduction in long-term debt and notes payable (194) (49)
Reduction in capital lease obligations (26) (29)
Dividends paid (112) (128)
Other -- net 6 9
------ ------
NET CASH PROVIDED BY FINANCING ACTIVITIES 330 72
------ ------
NET INCREASE (DECREASE) IN CASH AND EQUIVALENTS (101) 201
CASH AND EQUIVALENTS AT BEGINNING OF YEAR 480 449
------ ------
CASH AND EQUIVALENTS AT END OF PERIOD $ 379 $ 650
====== ======
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
5
<PAGE> 6
KMART CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in millions, except per share data)
(Unaudited)
1.) BASIS OF PRESENTATION
These interim unaudited consolidated financial statements have been
prepared in accordance with the rules and regulations of the Securities and
Exchange Commission, and in the opinion of management, reflect all adjustments
(which include normal recurring adjustments) necessary for a fair statement of
the results for the interim periods. These consolidated financial statements
should be read in conjunction with the financial statements and the notes
thereto included in the Company's 1994 Annual Report and Form 10-K filed for
the fiscal year ended January 25, 1995.
Certain prior year amounts have been restated for the effect of
divested and discontinued operations and to conform to current year
presentation.
2.) SUBSEQUENT EVENT
In May 1995, the Company commenced the initial public offering (IPO)
of shares of Borders Group, Inc. The Company sold 87% of its interest in
Borders Group, Inc., resulting in net proceeds of $493 which were received by
the Company in June 1995. Shares representing the remaining 13% interest are
subject to a 30-day option to purchase by the underwriters at the net IPO price
to cover over-allotments. Shares with respect to which the underwriters do not
exercise their over-allotment option, if any, become available for sale by the
Company commencing November 20, 1995. It is the Company's intention to divest
all of its interest in Borders Group, Inc. within one year. The funds from
this transaction will be used to pay down debt and further the Company's
modernization program. The Company expects to realize a one-time loss of
approximately $185 on the transaction and will report its investment in Borders
Group, Inc. as a discontinued operation in the future.
3.) PENSION CURTAILMENT
In April 1995, Kmart introduced a new profit sharing program for
active associates. For 1995, eligible associates will earn benefits under the
existing defined benefit pension plan as well as the new profit sharing
program. Effective January 31, 1996, the defined benefit pension plan will be
frozen and associates will no longer earn additional benefits under this plan.
As a result of freezing the defined benefit pension plan, the Company recorded
a pretax net curtailment gain of $124. This curtailment gain is attributable
to the net change in liabilities resulting from the decision to freeze the
defined benefit pension plan.
4.) INVENTORIES AND COST OF MERCHANDISE SOLD
The Company implemented a new inventory accounting system in 1995
which provides more precise, detailed departmental information by store that
will result in a more accurate valuation of inventories and the recording of
gross profit margins during interim periods in a manner more consistent with
that used to value inventory at year end. The use of this more precise interim
information will have no effect on annual results. However, gross profits
reported during each of the first three quarters of fiscal 1995 are anticipated
to be lower than those that would have been reported using the prior method,
with an equivalent positive effect in the fourth quarter. The new inventory
accounting system contributed to approximately 1.3%, as a percent of sales, of
the gross margin decline in the first quarter of 1995.
A substantial portion of the Company's inventories is accounted for
using the last-in, first-out (LIFO) method. Since LIFO costs can only be
determined at the end of each fiscal year when inflation rates and inventory
levels are finalized, estimates are used for LIFO in the interim consolidated
financial statements. Inventories valued on LIFO at April 26, 1995, April 27,
1994 and January 25, 1995, respectively, were $811, $871 and $804 lower than
the amounts that would have been reported under the first-in, first-out (FIFO)
method.
6
<PAGE> 7
ITEM 2 KMART CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION
FOR THE 13 WEEKS ENDED APRIL 26, 1995
RESULTS OF OPERATIONS
Store Activity
The Company's store activity for the first quarter of 1995, excluding the
divested Borders Group, Inc., is summarized as follows:
<TABLE>
<CAPTION>
FIRST QUARTER
ACTIVITY
JANUARY 25, ------------------ APRIL 26, APRIL 27,
General Merchandise 1995 OPENED CLOSED 1995 1994
------------------- ----------- ------ ------ ----------- ----------
<S> <C> <C> <C> <C> <C>
Kmart:
United States 2,316 18 (94) 2,240 2,330
Canada 128 -- -- 128 127
Czech Republic and Slovakia 13 -- -- 13 13
Mexico 2 2 -- 4 --
Singapore 2 -- -- 2 --
Other 20 -- (3) 17 21
----- ----- ----- ----- -----
Total General Merchandise 2,481 20 (97) 2,404 2,491
Specialty Retail
----------------
Builders Square 166 7 (1) 172 180
----- ----- ----- ----- -----
TOTAL STORES 2,647 27 (98) 2,576 2,671
===== ===== ===== ===== =====
</TABLE>
In addition to the store activity noted above, during the 13 weeks
ended April 26, 1995, U.S. Kmart completed three expansions and one
refurbishment as compared to four expansions and no refurbishments during the
1994 period.
In June 1995, the Company announced the closing of 72 U.S. Kmart
stores which do not meet the Company's sales, profit and return on investment
requirements. The stores will close beginning in late August with all stores
expected to be closed by the end of the fiscal year.
The activity in total number of stores closed/relocated, expanded or
refurbished to date, together with the dollar amounts relating thereto, were
substantially consistent with those contained in the 1993 restructuring plan.
As market and other conditions change, the Company will continue to refine the
plan and make necessary adjustments.
7
<PAGE> 8
KMART CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION -- CONTINUED
FOR THE 13 WEEKS ENDED APRIL 26, 1995
<TABLE>
<CAPTION>
Sales
13 Weeks Ended
------------------------- % CHANGE
APRIL 26, APRIL 27, -----------------------------------
($ Millions) 1995 1994 ALL STORES COMPARABLE STORES
---------- ---------- ---------- -----------------
<S> <C> <C> <C> <C>
General Merchandise
- -------------------
United States $ 6,564 $ 6,018 9.1 6.5
International 249 212 17.5 6.6 (a)
-------- --------
Total General Merchandise 6,813 6,230 9.4 6.5
Specialty Retail
- ----------------
Builders Square 630 683 (7.8) (6.1)
-------- --------
Total Continuing Sales 7,443 6,913 7.7 5.4
Divested
- --------
Borders Group, Inc. 354 303 16.8 -- (b)
-------- --------
Consolidated Sales $ 7,797 $ 7,216 8.1 5.2
======== ========
</TABLE>
(a) International comparable store sales change is calculated on sales in
the applicable local currency.
(b) Borders sales in millions were $140 and $72 in the 1995 and 1994
periods, respectively, and Waldenbooks sales were $214 and $231 in the
respective periods. Comparable store sales were up 15.2% at Borders
and down 2.4% at Waldenbooks.
Sales for the 13 weeks ended April 26, 1995, were $7,797 million, a
8.1% increase, over sales of $7,216 million in the same period of the prior
year. Comparable store sales increased 5.2% over the same period of the prior
year due primarily to an improved in-stock condition in general merchandise
stores compared with the prior year. Management believes this has resulted in
increased shopper frequency, higher transaction counts and a larger market
basket of merchandise purchased.
Cost of Merchandise Sold (Including Buying and Occupancy Costs)
Cost of merchandise sold for the 13 weeks ended April 26, 1995, was
$6,064 million as compared to $5,384 million in the same period of the prior
year. Gross margin as a percent of sales was 22.2% and 25.4% in 1995 and 1994,
respectively. This decrease, as a percent of sales, reflects, in part, a mix
of both apparel and hardline merchandise more heavily weighted toward
promotional items and lower-margined merchandise, which is a result of stepped
up promotional programs initiated in the third quarter of 1994. In addition, a
new inventory accounting system resulted in a more precise interim calculation
of the gross margin which contributed to approximately 1.3%, as a percent of
sales, of the gross margin decline. The use of this more precise interim
information will have no effect on annual results. However, gross profits
reported during each of the first three quarters of fiscal 1995 are anticipated
to be lower than those that would have been reported using the prior method,
with an equivalent positive effect in the fourth quarter. The impact of LIFO
included in the cost of merchandise sold reduced pretax earnings by $7 million
for the first 13 weeks of 1995 and $11 million for the comparable period of
1994.
Selling, General and Administrative ("SG&A") Expenses
SG&A expenses for the 13 weeks ended April 26, 1995, were $1,854
million or 23.8% of sales, as compared to $1,758 million, or 24.4% of sales, in
the same period of the prior year. This decrease as a percent of sales is a
result of cost reduction initiatives implemented and the leveraging of fixed
costs over a larger sales base.
8
<PAGE> 9
KMART CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION -- CONTINUED
FOR THE 13 WEEKS ENDED APRIL 26, 1995
Gain on Pension Curtailment
The net gain on the pension curtailment of $124 million for the 13
weeks ended April 26, 1995 resulted from the decision to replace the defined
benefit pension plan with a profit sharing program. Effective January 31,
1996, the defined benefit pension plan will be frozen and associates will no
longer earn additional benefits under this plan. The curtailment gain is
attributable to the change in net liabilities resulting from the decision to
freeze the defined benefit pension plan. The new profit sharing program
requires a minimum yearly contribution of $30 million.
<TABLE>
<CAPTION>
Operating Income
13 Weeks Ended
-----------------------
APRIL 26, APRIL 27,
($ Millions) 1995 1994 % CHANGE
--------- ---------- ---------
<S> <C> <C> <C>
General Merchandise
- -------------------
United States $ 86 $ 134 (35.8)
International (5) 1 --
----- ------
Total General Merchandise 81 135 (40.0)
Specialty Retail
- ----------------
Builders Square (11) 3 --
----- ------
Total Continuing Operating Income 70 138 (49.3)
Divested
- --------
Borders Group, Inc. (8) (4) --
----- ------
Consolidated Operating Income $ 62 $ 134 (53.7)
===== ======
</TABLE>
Operating income for the 13 weeks ended April 26, 1995, was $62
million, or 0.8% of sales, as compared to $134 million, or 1.9% of sales, in
the same period in the prior year. This decrease in operating income resulted
primarily from continuing competitive pressures on gross margins coupled with
the interim gross profit calculation change resulting from implementation of a
new inventory accounting system.
Interest Expense
Net interest expense for the 13 weeks ended April 26, 1995, was $109
million, or 1.4% of sales, as compared to $125 million, or 1.7% of sales, for
the same period in the prior year. Net interest expense on debt was down 20.6%
in the 1995 first quarter, primarily a result of lower average short-term
borrowings, due to applying the proceeds from the IPO's of OfficeMax and The
Sports Authority and the sale of the Company's equity interest in Coles Myer,
and the early retirement of long-term debt, resulting from applying the
proceeds from the sale of PayLess, all partially offset by higher market
interest rates being paid by the Company.
Equity in Net Income of Unconsolidated Companies
Equity in net income of unconsolidated companies for the 13 weeks
ended April 26, 1995 was $5 million as compared to $11 million for the 13 weeks
ended April 27, 1994 and includes equity income related to OfficeMax, The
Sports Authority and Meldisco.
Income Taxes
Income tax expense (benefit) for the 13 weeks ended April 26, 1995,
was $(14) million with an effective tax rate of 33.3% as compared to $4 million
with an effective tax rate of 20.0% in the same period of 1994 due to the low
level of taxable income in 1994 and the effect of restatements for discontinued
operations.
Discontinued Operations
Net income from discontinued operations for the 13 weeks ended April
27, 1994, was $2 million. Discontinued operations included the equity earnings
from Coles Myer prior to the Company's sale of its equity interest in November
1994.
9
<PAGE> 10
KMART CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION -- CONTINUED
FOR THE 13 WEEKS ENDED APRIL 26, 1995
Net Income (Loss)
As the result of the combination of the foregoing factors, primarily
reduced gross margin, net income (loss) for the 13 weeks ended April 26, 1995,
was $(28) million, or (0.4)% of sales, as compared to $18 million, or 0.2% of
sales, in the same period in the prior year.
LIQUIDITY AND FINANCIAL CONDITION
The Company's primary sources of working capital are cash flows from
operations and borrowings through its commercial paper program or under its
revolving credit facility. The Company had working capital of $3,531, $3,561,
$3,712 and $3,793 million at April 26, 1995, January 25, 1995, April 27, 1994
and January 26, 1994, respectively. Working capital ratios were 1.6 to 1.0, 1.6
to 1.0, 1.6 to 1.0 and 1.7 to 1.0 at the same periods, respectively. The
Company's working capital will fluctuate in relation to (i) profitability, (ii)
inventory levels during the course of the year due to seasonality and, (iii)
the number and timing of new store openings.
Net cash used for operating activities for the 13 weeks ended April
26, 1995 was $318 million as compared to $185 million in the same period of
1994. The increase in cash used was primarily attributable to decreased
earnings, excluding the net gain on pension curtailment, partially offset by a
decrease in cash used for inventories net of payables and a decrease in cash
used for PACE obligations.
Merchandise inventories, which were primarily accounted for under the
LIFO method of inventory valuation, increased 0.3% to $7,840 million at April
26, 1995 from, $7,815 million at April 27, 1994. Excluding the deconsolidation
of OfficeMax and The Sports Authority whose majority interests were sold in
November 1994, LIFO inventories were up 8.2%. This increase was largely the
result of a better in-stock position at general merchandise stores.
Net cash used for investing activities was $113 million for the 13
weeks ended April 26, 1995 which was primarily composed of capital expenditures
for new stores and store modernization. Cash provided by investing activities
was $314 for the 13 weeks ended April 27, 1994, primarily comprised of proceeds
from the divestiture of PayLess, partially offset by capital expenditures for
new stores and store modernization. Both 13 week periods reflect store
modernization program capital expenditures for projects completed and in
progress.
Net cash provided by financing activities amounted to $330 million
during the 13 weeks ended April 26, 1995 and was primarily attributable to a
net increase in long-term debt and notes payable of $462 million. The $72
million provided by financing activities during the 13 weeks ended April 27,
1994, was primarily attributable to a $220 million net increase in long-term
debt and notes payable. The increase in proceeds from notes payable is
primarily attributable to higher required borrowings resulting from higher
inventory levels.
Additionally, in April 1995, the Company's Board of Directors reduced
future quarterly dividends from a rate of 24 cents per share to 12 cents per
share, a level more in line with current earnings expectations for 1995.
The Company believes its future working capital needs and planned
capital expenditures can be sufficiently funded from operations or external
financing as necessary.
10
<PAGE> 11
PART II. OTHER INFORMATION
ITEM 5. OTHER INFORMATION
On June 5, 1995, the Company announced that Floyd Hall, a retailing
executive with extensive experience in the discount store and supermarket
businesses, has been named chairman, president and chief executive officer,
effective immediately. With Hall's arrival at Kmart, Donald S. Perkins has
relinquished his role as chairman but remains a member of the Company's Board
of Directors and chairman of the Board's executive/finance committee. Anthony
N. Palizzi, executive vice president, general counsel and Ronald J. Floto,
executive vice president and president, Super Kmart Centers, who served as
interim president and chairman of the Company's management executive committee,
respectively, have resumed their previous responsibilities.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) The following exhibit is filed as a part of this report:
Exhibit 11 - Information on Computation of Per Share Earnings
Exhibit 27 - Financial Data Schedule (EDGAR filing only)
(b) Reports on Form 8-K: There was one report on Form 8-K filed by the
Registrant during the thirteen weeks ended April 26, 1995. The
report, dated April 11, 1995, included the Company's 1994 Annual
Report to Shareholders.
11
<PAGE> 12
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned, thereunto duly authorized.
The signatory hereby acknowledges and adopts the typed form of his name in the
electronic filing of this document with the Securities and Exchange Commission.
Date: June 6, 1995
Kmart Corporation
---------------------------------
(Registrant)
By: T. F. Murasky
---------------------------------
T. F. Murasky
EXECUTIVE VICE PRESIDENT
CHIEF FINANCIAL OFFICER
(Duly Authorized Officer,
Principal Financial and Accounting Officer)
12
<PAGE> 1
EXHIBIT 11
KMART CORPORATION
INFORMATION ON COMPUTATION OF PER SHARE EARNINGS
<TABLE>
<CAPTION>
($ Millions, except per share data) 13 Weeks Ended
-----------------------
April 26, April 27,
1995 1994
--------- ---------
<S> <C> <C>
I. Earnings per common and common equivalent share:
Income (loss) from continuing retail operations $ (28) $ 16
Less--Series C convertible preferred shares dividend declared (2) (2)
------ ------
(a) Adjusted income (loss) from continuing retail operations (30) 14
(b) Discontinued operations, net of income taxes - 2
------ ------
(c) Adjusted net income (loss) $ (30) $ 16
====== ======
Weighted average common shares outstanding 458.8 409.3
Weighted average $3.41 Depositary Shares outstanding
(each representing 1/4 share Series A conversion preferred) - 46.0
Stock Options --
Common shares assumed issued 0.2 7.9
Less--common shares assumed repurchased (0.2) (7.3)
------ ------
0.0 0.6
------ ------
(d) Applicable common shares, as adjusted 458.8 455.9
====== ======
Earnings per common and common equivalent share:
Adjusted income (loss) from continuing retail operations (a)/(d) $(0.06) $ 0.03
Discontinued operations, net of income taxes (b)/(d) - 0.01
------ ------
Net income (loss) (c)/(d) $(0.06) $ 0.04
====== ======
II. Earnings per common and common equivalent share
assuming full dilution:
(e) Income (loss) from continuing retail operations $ (28) $ 16
(f) Discontinued operations, net of income taxes - 2
------ ------
(g) Net income (loss) $ (28) $ 18
====== ======
Weighted average common shares outstanding 458.8 409.3
Weighted average $3.41 Depositary Shares outstanding
(each representing 1/4 share Series A conversion preferred) - 46.0
Weighted average Series C convertible preferred shares outstanding 9.1 9.7
Stock options--
Common shares assumed issued 0.2 7.9
Less--common shares assumed repurchased (0.2) (7.3)
------ ------
0.0 0.6
------ ------
(h) Applicable common shares, as adjusted 467.9 465.6
====== ======
Earnings per common and common equivalent share
assuming full dilution:
Income (loss) from continuing retail operations (e)/(h) $(0.06) $ 0.03
Discontinued operations, net of income taxes (f)/(h) - 0.01
------ ------
Net income (loss) (g)/(h) $(0.06) $ 0.04
====== ======
(1) (1)
</TABLE>
(1) This calculation is submitted in accordance with Regulation S-K item
601(b)(11) although contrary to paragraph 40 of APB Opinion No. 15
because it produces an anti-dilutive result.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED STATEMENTS OF INCOME AND CONSOLIDATED BALANCE SHEETS AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JAN-31-1996
<PERIOD-END> APR-26-1995
<CASH> 379
<SECURITIES> 0
<RECEIVABLES> 474
<ALLOWANCES> 0
<INVENTORY> 7,840
<CURRENT-ASSETS> 9,802
<PP&E> 11,400
<DEPRECIATION> 5,149
<TOTAL-ASSETS> 17,312
<CURRENT-LIABILITIES> 6,271
<BONDS> 1,965
<COMMON> 465
0
131
<OTHER-SE> 5,359
<TOTAL-LIABILITY-AND-EQUITY> 17,312
<SALES> 7,797
<TOTAL-REVENUES> 7,856
<CGS> 6,064
<TOTAL-COSTS> 6,064
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</TABLE>
