Kmart, Toys R Us Report Higher 3rd-Quarter Profit

Kmart Corp., its business growing despite the weak economy, said Monday that its third-quarter earnings rose 3.4%, while Toys R Us Inc. reported an 11.8% rise.

Kmart Corp.: The nation’s second-largest retailer reported earnings of $109.5 million, or 50 cents a share, in the quarter ended Oct. 30, compared to $105.9 million, or 53 cents a share, a year ago.

Per-share earnings fell because Kmart had more stock outstanding after an August offering to raise money for a store refurbishment program.

Third-quarter sales rose to $7.97 billion from $7.49 billion.

The discount and specialty retailer outperformed many other store owners as frugal consumers increasingly turned to lower-priced merchants. Other retailers have announced earnings declines for the quarter.

Analysts have said that Kmart is also benefiting from store renovations. The company expects to finish 700 renovations by the end of the year.

The goal is to have all stores redone by the end of 1994.

Chairman Joseph Antonini said in a recent interview that a refurbished Kmart typically sees a sales increase of 7% to 10%, while an expanded or relocated store has a gain of up to 50%.

Kmart, based in Troy, Mich., operates 2,356 discount department stores and is the parent of Pay Less Drug Stores, Builders Square, Waldenbooks, PACE Membership Warehouse and Sports Authority.

Toys R Us Inc.: The nation’s largest specialty toy retailer said it earned $32.1 million, or 11 cents per share, in the quarter ended Nov. 2, up from $28.7 million, or 10 cents per share, in the same period of 1990.

Sales rose to $1.18 billion from $1.05 billion.

The Paramus, N.J.-based retailer fared better in the third quarter than during the first half of the year, when the consumer spending slump reduced earnings.

Toys R Us expects to have nearly 500 toy stores in the United States by the end of the year, as well as 126 toy stores overseas and 189 Kids R Us clothing stores.

Earnings, D16