ShopKo Stores doubles net income in Q3

-- Home Textiles Today, 11/18/2004 1:07:00 PM

GREEN BAY , Wis. — ShopKo Stores, Inc. doubled its net income and increased its diluted earnings per share by 133 percent for the third quarter.

Net income was $2 million compared with $1 million last year and diluted earnings per share were 7 cents versus 3 cents.

Consolidated sales were $746.4 million compared with $758.5 million last year. Comp store sales for the third quarter decreased 1.5 percent.

During today’s third-quarter conference call, ShopKo Stores President and CEO Sam Duncan said, "We are pleased with our increase in earnings over last year, which reflects improvements in gross margin rates and tight expense control. In addition, we are well positioned for the fourth quarter with inventory levels below last year and the recent completion of seven ShopKo store remodels. We made progress on achieving the right balance between promotional sales and margin performance and will continue to focus on delivering profitable sales."

However, he added that linens and domestics as well as housewares were soft categories at the ShopKo and Pamida divisions. According to Duncan , early fall sales were slow due in part to warmer weather in the Midwest and a late back-to-school season. "It seemed as if everyone was slow at getting started this year," he explained.

"It will be interesting to see how the holiday season unfolds, but we don’t expect the season to be as competitive as last year," Duncan added.

ShopKo Stores maintains a cautious outlook for the remainder of the year. The company expects comparable-store sales for the fourth quarter to increase in the low single digits. Fourth quarter diluted earnings per share are expected to be $1.06 to $1.16.