Sears Canada income up 36.7% in 4Q

Don Hogsett, January 20, 2003

Sears Canada said fourth-quarter profits before one-time items climbed by 36.7 percent, to $95.3 million from $69.7 million the preceding year.

Throwing a fistful of one-time gains back into the totals for this year and last, overall earnings rose by 82.4 percent, to $143.4 million from $78.6 million a year ago.

Sales at the Canadian operations dipped by 3.6 percent, to $2.06 billion Canadian dollars, from $2.13 billion last year. Merchandise sales decreased by 3.9 percent, and same-store sales fell by 4.9 percent.

Mark Cohen, chairman and ceo, commented, "Given the general malaise evident throughout much of the industry, we are delighted with our fourth-quarter performance. Although sales were soft, gross margins improved by 513 basis points. Gross margin dollars increased by 11 percent, to $70.6 million. As a result, out operating profit improved by 37 percent."

In more signs of improvement, Cohen said, "Inventory levels were favorable at the end of the quarter, coming in $110. or 12.7 percent, below last year. Total debt, net of cash was down $231 million, or 10 percent."

Cohen said all the company's non-merchandise business segments showed increases. "Notably, travel revenues were up 47 percent, repair service revenues were up 7.8 percent, dealer store revenues increased 4.3 percent, and major appliance sales were up 2.5 percent. Sears MasterCard, which was launched in September in Ontario only, has been a resounding success with 125,000 activated accounts and receivables at year end of $150 million."

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