Excluding big charge, Sears profit up over 40%

By Staff -- Home Textiles Today, 10/17/2003 12:00:00 AM

Hoffman Estates, IL — Picking up a $141 million tab for an overhaul of its Great Indoors chain, including the shutdown of three of those mega-home- furnishings stores, Sears, Roebuck and Co. said third-quarter profits fell by 22.2 percent, to $147 million from $189 million last year.

But getting past the pot hole dug by the ailing chain, and excluding that one-time charge, profits actually jumped up by 42.4 percent, to 84 cents per share from 59 cents a year ago.

Hobbled by declining credit revenues, overall sales were held in check, inching up just 1.3 percent, to $9.8 billion from $9.7 billion last year. But merchandise sales and services rose at a modestly faster pace, climbing by 2.1 percent, to $8.4 billion from $8.2 billion a year ago. Same-store sales in U.S. stores improved by 1.2 percent in the midst of a tricky retail environment.

In the home group, said Sears, "the lawn and garden and fitness businesses continued to experience strong performances across all formats, while home appliances showed solid improvements in the quarter. Within apparel and accessories, improved merchandise offerings resulted in comparable store sales increases in the women's ready-to-wear, men's and footwear categories."

Alan Lacy, chairman and ceo, singled out Lands' End and Covington for praise. "We completed the roll-out of Lands' End merchandise to another 470 stores during the month of September and now carry the brand in all of our full-line stores nationwide. We continue to see a broader sales improvement provided by our Lands' End brands in Sears' full-line stores, as comparable store apparel sales for stores carrying the merchandise out-performed those without," said Lacy.