Sears Profits Fall 83 Percent
Chairman/CEO Alan J. Lacy cited weak demand in June and "the overhang of our spring apparel assortment and inventory issues."
Net income was $53 million in the second quarter ended July 3 compared with $309 million last year, an 83 percent drop. Last year's performance includes the results of the domestic Credit and Financial Products and National Tire & Battery businesses sold in fourth-quarter 2003. The credit business was sold to Citigroup, New York, generating net proceeds of $6 billion. NTB was sold to TBC Corp., Palm Beach Gardens, FL, a retailer of automotive tires, for about $260 million.
Domestic comparable-store sales decreased 2.9 percent.
In other news, Sears Canada posted operating income of $11 million in the quarter compared with $23 million last year. However, revenue increased 4.6 percent to $1.1 billion because of the rising Canadian dollar.
Also reporting second-quarter results yesterday was Office Depot Inc., Delray Beach, FL. Company sales totaled $3.2 billion, up 12 percent from last year.
During the first six months of 2004, sales grew 15 percent over last year. Worldwide comparable sales in the 925 stores and 80 delivery centers that have been open for more than one year increased 2 percent, both for the second quarter and first half of 2004. Global e-commerce sales reached $742 million in the quarter, a 22 percent increase.
Operating profit for the quarter totaled $120 million, a 47 percent increase over last year. Operating profit was $295 million for the first six months, up 22 percent.