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ShopKo cost-cutting reduces 3Q net loss

Lee Diercks, Don Hogsett -- Home Textiles Today, November 26, 2001

GREEN BAY, WI — Thanks to a close watch on expenses, ShopKo Stores Inc. was able to reduce its net loss in the third quarter. The Midwestern mass merchant reported a loss for the quarter of $5.2 million, compared with its third-quarter 2000 loss of $8.4 million.

ShopKo was able to trim more than 9 percent off its total selling, general and administrative expenses, which finished the third quarter at $151 million. Its ratio of SG&A to revenues fell 160 basis points between the 2000 third quarter and this year, to 18.9 percent.

"We continue to closely manage expenses and inventory levels to business trends while maintaining a strong liquidity position," said Bill Podany, ShopKo's president and ceo.

ShopKo's third-quarter sales slipped 2 percent, to $800.9 million. Looking inside this figure, the company's consolidated sales declined by an equal 2 percent, to $797.5 million. Same-store sales for the company increased 1.9 percent, which includes a 2.6 percent same-store sales growth in the ShopKo stores segment and a 0.4 percent comp-store decline for Pamida.

The company also said it expects fourth-quarter earnings per share to be in the range of 85 cents to $1.05.

Shopko Stores Inc.

QTR 11/3 (x000) 2001 2000 % CHG
( ): Denotes loss
Sales $800,908 $817,579 -2.0
Oper. income (EBIT) 26,856 27,943 -3.9
Net income (5,218) (8,424)
Per share (diluted) (0.18) (0.29)
Average gross margin 22.3% 23.9%
SG&A expenses 18.9% 20.5%
Nine months
Sales 2,380,413 2,393,119 -0.5
Oper. income (EBIT) 100,385 112,269 -10.6
Net income (6,668) 31,450
Per share (diluted) (0.23) 1.08
Average gross margin 22.7% 25.2%
SG&A expenses 18.5% 20.5%

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