Sears swings from black to red
-- Home Textiles Today, 10/21/2004 12:14:00 PM
HOFFMAN ESTATES, Ill. — 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 comes 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 a 2003 charge of $141 million tied to its Great Indoors Business.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, offset by the $141 million charge tied to Great Indoors.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."A dismayed 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.
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