Net profits at US discounter Kmart were down almost 40% to $249m for the fourth quarter, but still came in ahead of analysts' expectations for the period. Encouragingly, like for like sales were up a respectable 2.1%. "With our same store sales increasing over the past four months it is clear the new Kmart is closing the gap with our competition, and in some cases moving ahead," said chairman Chuck Conaway. Kmart has been investing heavily to convert its store portfolio to the most profitable Big Kmart fascia, with a wider selection of groceries alongside its general merchandise offer. It has also struck a supply deal with top US wholesaler Fleming to consolidate the purchasing power of the two companies and increase clout with manufacturers. Sales for the three months to January 31 were up 4.8% to $11.6bn. {{NEWS }}