USA: Kmart Chief In Hot Seat
Kmart is expected to release disappointing second-quarter earnings this week, putting its top executive on the spot to explain how the national retailer will turn itself around, according to a report published on Excite Business News. The company is in such trouble that only four of the 15 main analysts who cover Kmart say its stock is worth buying, The Detroit News reported Sunday. Kmart chairman and CEO Chuck Conaway will appear before Wall Street analysts for the first time since taking the job on May 31. Among the problems analysts say he must address are weak earnings, a sinking stock and competition from other retailers. The Troy-based company expects its earnings will be between $19m and $33m, or 4 to 7 cents a share, the News reported. Last year, it earned 26 cents a share. Kmart has blamed its problems on unseasonably cool weather and slower apparel sales. However, some say mismanagement at the company is unlikely to encourage the situation to improve. "The biggest challenge in front of (Conaway) is really putting up the numbers to make Wall Street notice," Jeff Stinson, an analyst with Midwest Research, told the News. "Let the numbers do the talking." Last month, Conaway announced the closure of 72 under-performing stores, including two in Michigan. Kmart plans to hire a new advertising agency by September, in time for the busy holiday campaign. But in the short run, Conaway will have to focus on pleasing analysts and its investors. "He has a very big challenge ahead of him in growing Kmart. No one has a firm idea of what his plans really are," Stinson told the News. "But investors are willing to listen."
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