The sale by Sears, Roebuck and Co. of its credit card operation proved to be the highlight of the Hoffman Estates, IL, company's fourth quarter.
It concluded 2003 by posting net income of $2.7 billion for the quarter ended Jan. 3 compared with $848 million in 2002's fourth quarter.
Yesterday's announcement included the pretax gain of $4.1 billion related to the sale of the company's domestic Credit and Financial Products business. It was sold Nov. 3 to Citigroup. Citigroup and Sears also entered a multi-year marketing and servicing agreement involving a range of each company's businesses, products and services.
Total revenue reached $12.25 billion in the 14 weeks ended Jan. 3 versus $12.52 billion in the 13 weeks ended Dec. 28, 2002. Revenue was $41.12 billion for the 53 weeks ended Jan. 3, after reaching $41.37 billion in the 52 weeks ended Dec. 28, 2002. Year-to-year quarterly credit and financial products revenue plunged from $1.46 billion to $616 million.
Affecting Sears' fourth-quarter performance were:
· A pretax charge of $791 million on the early retirement of debt that occurred as a result of the sale of the credit card unit.
· A pretax gain of $81 million related to the sale of the company's National Tire & Battery business.
· A pretax gain of $265 million related to the sale of the remaining investment in Advance Auto Parts.
Sears' Retail and Related Services operation generated operating income of $753 million compared with $726 million in the fourth quarter of 2002, with the current total benefiting from an extra week in the fiscal quarter and revenue generated from the Citigroup deal.
Revenue for the fourth quarter reached $10.1 billion, up 3.6 percent. Retail and Related Services revenue was helped by about 6 percent due to the extra week. Comparable-store sales in the quarter, excluding the 53rd week, fell 2.1 percent.
Lands' End generated more than $400 million of in-store sales in 2003.
Also reported was full-year 2003 net income of $3.4 billion compared with $1.4 billion in 2002.