8-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):  May 20, 2004

SHOPKO STORES, INC.

(Exact name of registrant as specified in its charter)

Wisconsin	1-10876	41-0985054
(State or other jurisdiction	(Commission file number)	(IRS Employer
of incorporation)		Identification No.)

700 Pilgrim Way

Green Bay, Wisconsin 54304

(Address of principal executive offices)

Registrant’s telephone number, including area code: (920) 429-2211

Item 7.          Financial Statements and Exhibits

(c)      Exhibits

This exhibit is furnished pursuant to Item 12 and shall not be deemed to be “filed.”

Exhibit No.

Description

                99.1

         Press Release dated May 20, 2004

Item 12.         Results of Operations and Financial Condition

On May 20, 2004, Shopko Stores, Inc. (“Shopko”) issued a press release announcing its financial results for the quarter and fiscal year ended May 1, 2004.  A copy of the press release is attached hereto as exhibit 99.1.

The information in this Report, including the exhibit attached hereto, is furnished solely pursuant to Item 12 of this Form 8-K.  Consequently, it is not deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liabilities of that section. It may only be incorporated by reference in another filing under the Securities Act of 1933 or the Exchange Act of 1934 if such subsequent filing specifically references this Form 8-K.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

SHOPKO STORES, INC.

Date:  May 20, 2004

/s/ Peter G. Vandenhouten                      

Peter G. Vandenhouten

Assistant General Counsel

and Secretary

EXHIBIT INDEX

Exhibit No.

Description

99.1

Press Release dated May 20, 2004

EX-99.1

Exhibit 99.1

NEWS RELEASE  

Contacts:

Media – John Vigeland

(920) 429-4132

Investors – R. John Pindred

(920) 429-7039

SHOPKO REPORTS FIRST QUARTER RESULTS

GREEN BAY, Wis. (May 20, 2004)    ShopKo Stores, Inc. (NYSE: SKO), today announced financial results for the first quarter ended May 1, 2004.  Consolidated sales increased 3.8 percent to $735.0 million compared with $707.9 million last year.  Consolidated comparable store sales for the first quarter increased 3.9 percent.  

Net loss for the first quarter was $2.4 million compared with a net loss of $1.1 million last year.  Diluted loss per share was $0.08 compared with a loss per share of $0.04 last year.  

Commenting on the quarter, ShopKo Stores, Inc. President and Chief Executive Officer Sam Duncan said, “Overall, first quarter earnings were in line with our expectations.  We were encouraged by the continued improvement in comparable store sales.  Our increased promotional efforts generated additional traffic and sales, and indicated that our merchandise initiatives are appealing to consumers.”

Consolidated gross margin as a percent of sales was 25.0 percent compared with 25.8 percent last year.  This decrease is primarily attributable to increased promotional activity in the ShopKo division.

Consolidated selling, general and administrative expenses (SG&A) as a percent of sales for the first quarter were 21.9 percent compared with 22.0 percent last year.  The SG&A rate decrease was primarily attributable to sales leverage and disciplined store expense management at the ShopKo division.

Other Factors

Inventory increased 7.1 percent, principally due to expanded merchandise assortments and deeper in-stock levels to support the merchandising and sales growth initiatives.  Accounts payable increased by $39.4 million due to the higher levels of inventory and the timing of clearing of certain pharmacy payables, relative to the quarter end date.

Interest expense was $8.6 million compared with $10.6 million last year, a reduction of 19.4 percent, due primarily to lower debt levels.  Debt declined by $56.2 million from the first quarter of 2003.  The company expects part of the decline to reverse in the second quarter because of the payables timing noted above and growth in the rate of capital expenditures.

Capital expenditures were $10.4 million compared with $2.8 million last year.  The increase is related to remodeling activity in both divisions and the Omaha distribution center expansion and consolidation.  The company continues to expect capital expenditures of up to $100.0 million for the fiscal year.

Second Quarter/Fiscal 2004 Outlook

The company expects its consolidated comparable store sales increase for the second quarter ending July 31, 2004 to be in the mid single digits.  Second quarter earnings are expected to be in the range of $0.24 to $0.29 per share.  

For the fiscal year ending January 29, 2005, the company continues to expect its consolidated sales and comparable store sales to increase in the low single digits, and its earnings to be in the range of $1.33 to $1.48 per share.

First Quarter Conference Call Arrangements

ShopKo Stores, Inc. will host a conference call and real-time webcast May 20, 2004, at 10:30 a.m. Central Daylight Time (CDT) to discuss first quarter results and fiscal 2004 business outlook.  Participants may access the conference by dialing 1-800-860-2442 and asking for the ShopKo Stores, Inc. conference call.  The webcast will be archived for two weeks at www.shopko.com.

The call will be rebroadcast immediately following the call through May 28, 2004.  The replay can be accessed by dialing 1-877-344-7529 or 412-858-1440.  When prompted for an account number, dial 216#, then dial 1 for the recorded conference.  When prompted for the conference number, dial 344387#, then press 1 to begin the playback.

ShopKo Stores, Inc. is a customer-driven retailer of quality goods and services in two distinct market environments.  Headquartered in Green Bay, Wis., the company operates 359 stores in 23 states throughout the Midwest, Western Mountain and Pacific Northwest regions.  One hundred forty-one multi-department ShopKo stores are located in mid-sized to larger cities and 218 convenient one-stop Pamida stores provide Hometown Value to customers in smaller communities of rural America.  ShopKo Stores Inc. is listed on the New York Stock Exchange under the symbol SKO.  For more information about ShopKo or Pamida visit our website at www.shopko.com.

This press release contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including statements regarding expected sales, earnings per share, capital expenditure plans and other financial results.  Such statements are subject to important factors that could cause ShopKo's actual results to differ materially from those anticipated by the forward-looking statements, including those referenced in ShopKo's current annual report on Form 10-K or as may be described from time to time in ShopKo's subsequent SEC filings; such factors are incorporated by reference.

#####

Consolidated Sales Summary (dollars in millions)

First Quarter

Business Segments	02/01/04- 05/01/04 (13 weeks)	02/02/03- 05/03/03 (13 weeks)	Change Total**	Change Comp* (13 weeks vs. 13 weeks)
ShopKo	$552.8	$530.5	4.2%	4.2%
Pamida	182.2	177.4	2.7%	3.3%
Consolidated	$735.0	$707.9	3.8%	3.9%

*Comparable store sales represent sales of those stores open during both fiscal years and do not include sales from the ShopKo wholesale optical lab.

**Pamida division total sales variance reflects sales in the prior year periods from seven locations, which have been closed and not replaced, and two new Pamida locations opened in fiscal year 2003.

ShopKo Stores, Inc. and Subsidiaries Consolidated Statements of Operations First Quarter
		13 Weeks		13 Weeks
		Ended		Ended
		May 1,		May 3,
(In thousands, except per share data)		2004		2003
Revenues:
Net sales	$	735,033	$	707,917
Licensed department rentals and other income		3,096		3,047
		738,129		710,964
Costs and expenses:
Cost of sales		551,222		525,254
Gross margin		183,811		182,663
Selling, general and administrative expenses		160,738		155,921
Depreciation and amortization expenses		21,500		20,971
		182,238		176,892
Income from operations		4,669		8,818
Interest expense		8,568		10,635
Loss before income taxes		(3,899)		(1,817)
Credit for income taxes		(1,520)		(722)
Net loss		(2,379)		(1,095)
Net loss per share of common stock:
Basic:	$	(0.08)	$	(0.04)
Diluted:	$	(0.08)	$	(0.04)
Weighted average number of common shares outstanding:
Basic:		29,210		28,930
Diluted:		29,210		28,930

ShopKo Stores, Inc. and Subsidiaries Consolidated Statements of Operations Percents of Sales First Quarter
	13 Weeks	13 Weeks
	Ended	Ended
	May 1,	May 3,
	2004	2003
Revenues:
Net sales	100.0	100.0
Licensed department rentals and other income	0.4	0.4
	100.4	100.4
Costs and expenses:
Cost of sales	75.0	74.2
Gross margin	25.0	25.8
Selling, general and administrative expenses	21.9	22.0
Depreciation and amortization expenses	2.9	3.0
	24.8	25.0
Income from operations	0.6	1.2
Interest expense	1.1	1.5
Loss before income taxes	(0.5)	(0.3)
Credit for income taxes	(0.2)	(0.1)
Net loss	(0.3)	(0.2)

ShopKo Stores, Inc. and Subsidiaries Business Segment Information First Quarter
		13 Weeks		13 Weeks
		Ended		Ended
		May 1,		May 3,
(Dollars in thousands)		2004		2003
ShopKo Retail Segment
Net sales	$	552,799	$	530,527
Licensed department rentals and other income		2,765		2,746
		555,564		533,273
Costs and expenses:
Cost of sales		415,232		394,084
Gross Margin		137,567		136,443
Selling, general and administrative expenses		111,190		108,357
Depreciation and amortization expenses		15,297		14,980
		126,487		123,337
Income from operations	$	13,845	$	15,852
Pamida Retail Segment
Net sales	$	182,234	$	177,390
Licensed department rentals and other income		331		301
		182,565		177,691
Costs and expenses:
Cost of sales		135,990		131,170
Gross Margin		46,244		46,220
Selling, general and administrative expenses		42,956		42,049
Depreciation and amortization expenses		6,057		5,844
		49,013		47,893
Loss from operations	$	(2,438)	$	(1,372)
Corporate Segment
Net sales	$	-	$	-
Licensed department rentals and other income		-		-
		-		-
Costs and expenses:
Selling, general and administrative expenses		6,592		5,515
Depreciation and amortization expenses		146		147
		6,738		5,662
Loss from operations	$	(6,738)	$	(5,662)
Consolidated
Income from operations	$	4,669	$	8,818

ShopKo Stores, Inc. and Subsidiaries Business Segment Information Percents of Sales First Quarter
	13 Weeks	13 Weeks
	Ended	Ended
	May 1,	May 3,
	2004	2003
ShopKo Retail Segment
Net sales	100.0	100.0
Licensed department rentals and other income	0.5	0.5
	100.5	100.5
Costs and expenses:
Cost of sales	75.1	74.3
Gross Margin	24.9	25.7
Selling, general and administrative expenses	20.1	20.4
Depreciation and amortization expenses	2.8	2.8
	22.9	23.2
Income from operations	2.5	3.0
	13 Weeks	13 Weeks
	Ended	Ended
	May 1,	May 3,
	2004	2003
Pamida Retail Segment
Net sales	100.0	100.0
Licensed department rentals and other income	0.2	0.2
	100.2	100.2
Costs and expenses:
Cost of sales	74.6	73.9
Gross Margin	25.4	26.1
Selling, general and administrative expenses	23.6	23.7
Depreciation and amortization expenses	3.3	3.3
	26.9	27.0
Loss from operations	(1.3)	(0.7)
Consolidated
Income from operations	0.6	1.2

ShopKo Stores, Inc. and Subsidiaries Consolidated Condensed Balance Sheets (In thousands)
		May 1,		May 3,
		2004		2003
Cash and cash equivalents	$	28,289	$	31,658
Receivables, less allowances		52,951		50,627
Merchandise inventories		644,244		601,410
Other current assets		10,726		13,002
Total current assets		736,210		696,697
Other assets and deferred charges		7,660		12,540
Intangible assets		25,480		20,621
Net property and equipment		770,518		790,321
Total assets	$	1,539,868	$	1,520,179
Short-term debt	$	117,423	$	75,707
Accounts payable - trade		311,149		271,778
Accrued liabilities		166,619		168,947
Current portion of long-term obligations		63,179		94,354
Total current liabilities		658,370		610,786
Long-term obligations		244,800		311,556
Other long-term obligations		25,158		26,488
Deferred income taxes		22,803		23,795
Shareholders' equity		588,737		547,554
Total liabilities and shareholders' equity	$	1,539,868	$	1,520,179