Kmart Rings Up Sales, Profits

Kmart Corp.'s earnings surged a better-than-expected 32 percent in the fourth quarter on robust sales of clothing and home products, the company said Wednesday.

The nation's second-biggest discount retailer (KM) said earnings totaled $353 million, or 65 cents a share, compared with $186 million, or 35 cents, the same period a year earlier. Analysts surveyed by First Call expected the company to earn 61 cents.

Kmart's stock rose 1/8 to 17 13/16 in early trading of 1.2 million shares.

Same-store sales rose 4.5 percent in the fourth quarter and total sales grew 6.6 percent to $10.4 billion from $9.8 billion.

The company looks poised for further growth as it posted a 5.8 percent gain in February same-store sales.

"Kmart is on the right track and gaining speed," said Kmart's chief executive Floyd Hall in a statement.

Hall cited strong performances turned in by brands such as Martha Stewart Everyday home fashions, Route 66 apparel and accessories and Sesame Street children's apparel as keys to Kmart's improvement.

Written By Lisa J Ulmer, CBS MarketWatch