K mart Cites Computerized Register in Earnings Rise

K mart Corp., the nation’s second-largest retailer, reported a sharp rise in earnings, citing the benefits of merchandising programs and improved inventory controls due to a computerized cash register now used in many of its stores.

In the first quarter ended April 29, the Troy, Mich.-based company said earnings rose to $115.5 million, up 26% from a year ago. Revenue rose 9.3% to $5.65 billion.

The company said it benefited from a decline in its tax rate to 40.2% from 44.6%. The lower rate reflects the benefits of tax reform, which favors companies like retailers that have a relatively low investment program. But the gain was largely offset by an inventory accounting change which resulted in a pretax charge of $22.5 million compared to $15.0 million in the prior year.

K mart said the point of sale system, an on-line cash register connected to 499 of its stores feeding information on all sales into a central computer, was a key factor in its strong performance. Store chains have found the systems useful in spotting sales trends and in keeping down inventory levels.

The company has been involved in a restructuring program, which most recently led to the sale of its Kresge and Jupiter stores to McCrory Corp. The transaction is expected to be completed early next month.