follow us

Sears Swings From Black To Red

With same-store sales falling off 4 percent, and margins under heavy pressure, Sears, Roebuck and Co. recorded a third quarter loss of $61 million, compared with a year-before profit of $147 million.

Merchandise sales and services dropped 2.4 percent, to $8.2 billion from $8.4 billion

The loss came even though the retailer slashed its operating costs during the third quarter, generating $220 million in year-over-year savings as it put behind it $184 million in costs related to sold-off businesses.

The retailer posted an operating loss of $106 million in its U.S. business during the period, compared with an operating profit of $222 million last year. Prior year results included $369 million in operating income from the sold-off credit business.

Alan Lacy, Sears chairman and CEO, commented, “A number of factors contributed to a disappointing third quarter, including softer retail demand, larger than expected costs associated with seasonal transitions and a slower ramp up of sales following certain business resets.”

An unforgiving Wall Street responded by pounding Sears stock down $2.79 a share, or 7.6 percent, to $34.13 a share, in mid-day trading on Oct. 21.

Sears, Roebuck and Co.

Qtr. 10/2 (x000) 2004 2003 % change
a - Merchandise sales and services, excluding revenues from the sold-off credit card business.
b - Prior-year operating profits included results of the now-divested credit card business.
c - Third quarter results include a $16 million provision for uncollectible accounts, down from $567 million last year; a $7 million loss on the company's minority stake in another business, compared with a year-before loss of $6 million; and income-tax expense of $25 million, compared with a prior-year tax benefit of $91 million. The prior-year third quarter included a $112 million special charge. Nine month results include a $43 million provision for uncollectible accounts, compared with $1.5 billion during the same period a year ago; $41 million in special charges vs. $140 million last year; $2 million in income tax expense vs. a year-before tax benefit of $392 million; and a $15 million loss from the company's minority stake in another business, compared with a $16 million loss a year ago.
Sales $8,210,000a $8,409,000a -2.4
Oper. Income (EBIT) 19,000 635,000b -97.0
Net income (61,000)c 147,000c
Per share (diluted) (0.29) 0.52
Average gross margin 26.2% 27.0%
SG&A expenses 24.5% 26.5%
Nine months
Sales 24,613,000a 24,734,000a -0.5
Oper. Income (EBIT) 178,000 2,027,000b -91.2
Net income (867,000)c 648,000c
Per share (diluted) (4.03) 2.17
Average gross margin 27.0% 27.2%

Featured Video

  • Online Moves From Afterthought To Main Thought For Textiles Suppliers

    Camera Icon More Videos

Other Home Furnishings Sites

Casual Living
Gifts and Decorative Accessories
Home Accents Today
Kids Today
Furniture Today