RETAILING

Kmart Predicts a Drop in Its Earnings: The retailer said it expects that earnings for its second quarter, ending July 28, will be significantly below the 37 cents a share it reported a year earlier. It blamed consumer caution and losses at its warehouse stores. Kmart Corp. Chairman Joseph E. Antonini said apparel sales have been disappointing because of cautious spending and the late arrival of warm weather across much of the country. Stock in the Troy, Mich.-based retailer closed at a 52-week low of $20.125 a share, down $1.50, in heavy volume on the New York Stock Exchange.