K mart Profit Is 13% Higher in 4th Quarter : Dayton Hudson Net Off 34%; Sale of Unit Cited

K mart Corp. reported Thursday that its fourth-quarter earnings rose nearly 13% while Dayton Hudson Corp. said its income fell from a year earlier, when it had a one-time gain from the sale of one of its divisions.

K mart, the nation’s second-largest retailer, said it earned $321.2 million in the quarter ended Jan. 27, compared to $285 million in the same period a year earlier.

Sales for the quarter totaled $7.75 billion, up from $7.23 billion in the year-earlier quarter.

For all of fiscal 1987, K mart earned $692.2 million, up 19% from the $582.3 million the company recorded in 1986.

The retailer’s full-year sales totaled $25.6 billion, up from $23.8 billion the previous year.

“K mart had good, solid earnings improvement because of effective control of their business,” said Jeffrey B. Edelman, a retail industry analyst for the investment firm Drexel Burnham Lambert. “Markdowns were held to a minimum.”

Mervyn’s Sales Rise

Dayton Hudson, the nation’s sixth-largest retailer, said it earned $133.7 million in the quarter ended Jan. 30, down 34% from $202.4 million in the year-earlier period.

However, the 1986 fourth quarter included an $85.2-million gain from the sale of Dayton Hudson’s B. Dalton Booksellers chain. Excluding that gain, Dayton Hudson’s earnings rose 11% in the latest quarter.

Dayton Hudson’s fourth-quarter figures reflect “some positive earnings swings from a division that had been very depressed last year,” said Edelman.

Edelman was referring to the company’s Mervyn’s apparel stores, which had helped pull Dayton Hudson’s earnings into a decline in recent quarters.

Sales for the latest quarter totaled $3.68 billion, up from $3.12 billion in the year-earlier quarter.

For all of fiscal 1987, Dayton Hudson earned $228.4 million, down 26% from $310 million in 1986.

Excluding the fourth-quarter 1986 gain, the retailer’s earnings fell 10%.

Full-year sales totaled $10.68 billion, up from $9.26 billion.

Dayton Hudson said its Target discount stores division continued to do well in 1987, but its department stores suffered from a drop in sales.

3,934 Stores

Meanwhile, Charming Shoppes Inc. reported that its fourth-quarter income plummeted 46% as its sales declined along with those of many other apparel retailers.

Charming Shoppes said it earned $7.5 million in the quarter ended Jan. 30, down from nearly $14 million in the year-earlier period.

Sales rose to $182.9 million from $163.8 million.

For the full year, Charming Shoppes said it earned $42.6 million, up 5% from $40.5 million in 1986. Sales totaled $638.6 million in fiscal 1987, up from $521.2 million the year before.

K mart said it had 3,934 stores at the year’s end, including K mart, Waldenbooks, Builders Square and Pay Less Drug stores.

Besides Mervyn’s and Target, Dayton Hudson’s divisions include Dayton Hudson Department Stores and Lechmere’s home electronics, appliance and sporting goods stores.

The company had a total of 577 stores at year’s end.