Kmart's sales for the month were on plan and we are pleased with our progress in a number of key businesses.

Kmart's sales for October were on plan despite softer apparel sales due to unseasonably warm weather during the latter half of the month. Sales volumes for the third quarter were near expectations. Categories showing particular strength for the month included home appliances and electronics, do-it-yourself, home decor, cosmetics and fragrances, consumables, stationery and pharmaceuticals.

September comparable sales were on plan, with strength in home appliances and electronics partially offsetting slow fall apparel results due to unseasonably warm weather. Other categories showing strong performance included home decor, outdoor sporting goods, jewelry, stationery, cosmetics and fragrances, cameras and accessories, consumables, seasonal items and pharmaceuticals.

June sales were ahead of plan, reflecting strong performance in hot-weather-related categories such as seasonal apparel, accessories, and specialty items.

Sales increases in our pharmacy, home fashions, health and beauty care, consumables and apparel areas, together with a substantial lift in gross margin rate, enabled Kmart to more than triple earnings per share in the quarter before the non-recurring charge.

While they have made impressive progress, we believe that the sales cycle can be as long as two years given the inertia inherent in many large marketing organizations.