K MART &lt;KM> SAYS RECORD 1986 NET "TURNING POINT"

  K Mart Corp said its record fiscal
  1986 net earnings of 582.3 mln dlrs, a rise from 221.2 mln dlrs
  a year ago, marked a "major turning point" for the world's
  second biggest retailer.
      K Mart said the earnings rise for the fourth quarter ended
  January 28 to 285 mln dlrs from 10.5 mln dlrs resulted from 
  "merchandising, refurbishing and expense control."
      A year ago, K Mart took a charge of 239 mln dlrs for
  discontinued operations. Earnings from continuing retail
  operations in the quarter totalled 270 mln dlrs or 2.00 dlrs a
  share compared with 249.4 mln dlrs or 1.91 dlrs a year ago.
      K Mart Chairman Bernard Fauber said "the success of these
  programs is better illustrated by the strong 35.9 pct increase
  in 1986 income from continuing operations before income taxes
  to 1.03 billion dlrs, the first time K Mart Corp has reached
  this milestone."
      Sales for the 1986 fiscal year reached a record 23.8
  billion dlrs, an 8.1 pct rise from 22.04 billion dlrs the prior
  year. K Mart said 1985 was restated to account for discontinued
  operations. Comparable store sales rose 5.5 pct in 1986 over
  1985, it said.
      Fauber said the sales growth came from greater consumer
  acceptance of K Mart's apparel merchandise, "a marked increase
  in hardline merchandise sales and a growing contribution from
  specialty retailing operations."
      K Mart said its fourth quarter pre-tax income from
  continuing operations was 493 mln dlrs, a 32.3 pct gain from
  372.6 mln dlrs last year. It said sales in the period grew 8.8
  pct to 7.23 billion dlrs from a restated 6.65 billion dlrs in
  1985 with comparable store sales up 4.7 pct.
      K Mart said its effective tax rate rose in 1986 to 44.6 pct
  from 37.6 pct in 1985. But it said selling, general and
  administrative expense eased to 23.2 pct of sales from 23.7 pct
  in 1985.
      "Our performance in 1986 marks a major turning point for K
  Mart," Fauber said in a statement.
      "In the years immediately prior to 1986, we focused on
  changing the look of our stores and the structure of the
  company."
      K Mart, he said, committed billion of dollars for store
  remodeling and installing a centralized point of sale system,
  upgraded its merchandise mix, acquired three large specialty
  retailers, divested underperforming businesses and restructured
  its long-term debt.
      "We were forced to pay a temporary price in the form of
  slower earnings growth and a lower rating by the investment
  community. However, beginning with the fourth quarter of 1985,
  our improved performance is proof that our approach is correct
  for the long term," the K Mart chairman said.
  

