Kmart

(KM)

unveiled a strategy on Tuesday designed to improve its financial health, but said the move would lower earnings this year and lead to the closing of 72 stores.

The initiative, which is aimed at stimulating the company's sagging sales and stock price, will lead to a one-time loss of $740 million.

"A noncompetitive customer experience, supply chain and store execution have led to inadequate financial performance," said Chuck Conaway, Kmart's chairman and chief executive. "To make Kmart a stronger and more competitive business model, we must take swift and decision action."

Excluding nonrecurring charges, Kmart said it expects second-quarter operating earnings between 4 cents and 7 cents a share, well below analysts' forecast of 16 cents a share. Kmart will report its second-quarter results on August 10. Full-year operating earnings, before the charges, also are expected to fall below estimates, Kmart said.

Kmart, which has 2,165 stores across the country, said it will close 66 stores by November and shut down six others in California, Ohio and New York later this year. Employees affected by the reorganization, the company said, will have an opportunity to apply for jobs at other Kmart stores.

Retailer

Circuit City

(CC) - Get Report

, meanwhile, announced a

restructuring plan of its own on Tuesday. The move -- which puts the company's focus on more profitable electronics and home office goods -- is expected to lower earnings in the second and third quarters of this year and result in the loss of 1,000 jobs.