Kmart reported a much smaller loss in the 2003 fiscal second quarter, but sales were still stuck in the doldrums as the discount retailer fights to re-build consumer traffic and sales after its emergence from Chapter 11 bankruptcy protection.

The net loss for the quarter was $5 million, or (6 cents) per share, compared to a reported net loss of $293 million in the year-ago period.

Gross margin improved 410 basis points to 21.8% in the quarter, due primarily to a “decrease in shrinkage”, improved sales mix to higher margin items and the write-off of certain buying and occupancy expenses.

Sales declined 21.3% to $5.7 billion from $7.2 billion a year ago. Total sales were impacted by the closure of 599, or one-third, of all stores as part of the company’s reorganization plan.

On a same-store basis, sales declined 5.4% for the Q2.


>>> We would have expected better comp store results given that they supposedly closed all under-performing stores…