Kmart currently operates 1,480 stores in North America, and Sears has about 2,400 units. Kmart's report acknowledges that the merger will result in store closings, but is not specific as to how many.

The merger, which will form an entity named Sears Holding Corp., was first announced in November. Shareholders will vote on the measure March 24. The combined companies would form the third-largest US retailer behind Wal-Mart and Home Depot.

During its Q4, which ended Jan. 26, Kmart posted a 4.5% same-store sales decline, an improvement over its 13.5% drop during the same period the year before. The discounter also reported an operating income of $472 million, compared to $497 million over the same year-ago period, and a net income of $309 million, up from $270 million.