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|Subject: Earnings||Date: 8/14/1997 8:54 AM|
|Author: TMFMensa||Number: 7 of 71|
NEW YORK, Aug. 14 /PRNewswire/ -- Woolworth Corporation (NYSE:Z) today reported that income from continuing operations for the 13-weeks ended July 26, 1997 was $26 million, or $0.19 per share, unchanged from the restated year-earlier period. Net loss for the quarter, which includes an after-tax charge of $207 million, or $1.54 per share, for discontinued operations relating to the closing of the Company's U.S. general merchandise operations, was $181 million, or $1.35 per share. This compares to net income of $22 million, or $0.17 per share, for the same period as reported a year ago. Operating results of the Company's domestic general merchandise operations have been excluded from continuing operations for all periods reported.
For the six-months, income from continuing operations increased 291% to $43 million, or $0.32 per share, from $11 million, or $0.08 per share, for the comparable restated period of the previous year. Net loss for the six-months was $180 million, or $1.34 per share, and includes a $223 million, or $1.66 per share, after-tax charge for the discontinued general merchandise operations. This compares to break-even results in the same six-month period as reported a year ago.
Sales for the quarter declined 6.7% to $1,500 million from $1,607 million in the same year-earlier period, reflecting, in part, 423 fewer stores from continuing operations year-over-year. Comparable-store sales declined 2.5% for the quarter. Sales for the six-months declined 4.3% to $3,039 million from $3,177 million a year earlier. Comparable-store sales for the six-month period declined 1.4%. Excluding the effect of foreign currency fluctuations and sales from disposed operations, sales remained flat for the quarter and increased 2.5% for the six-months as compared to the prior year.
``Sales for June and July proved to be softer than expected, particularly for the athletic group of stores,' said Roger Farah, Woolworth's chairman and chief executive officer. ``Not only were we competing against the Olympics of last year, we also encountered an increased promotional selling environment which made comparisons very difficult during the quarter.'
Operating profit from continuing operations (before disposal of real estate and businesses and excluding U.S. general merchandise) for the quarter declined to $74 million from $78 million in the restated year-earlier period. For the six-months, operating profit rose 23% to $129 million from $105 million in the comparable restated period a year ago.
``Our second quarter operating results reflect continued tight cost controls and the ongoing leveraging of selling, general and administrative expenses which, as a percentage of sales, declined 120 basis points from the previous year to 24.7%,' said Mr. Farah. ``This improvement more than offset the decline in gross margin as a result of aggressive markdown activity to ensure our merchandise assortment remains current for the upcoming back-to- school selling season.'
In connection with the previously announced closing of the Company's U.S. general merchandise operations, as well as the conversion of approximately 100 locations to its Foot Locker and Champs athletic formats, the Company has indicated that the process is proceeding according to plan.
During the second quarter, the Company opened 48 stores, closed 66 stores and remodeled or relocated 75 stores. Woolworth Corporation ended the quarter with 7,117 stores in North America, Europe and Australia. This compares to 7,540 stores, excluding the U.S. general merchandise stores, at the end of the 1996 second quarter.
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