Sears' earnings increased 75% in 1Q, though revenue declined

Profit per share rose to 60 cents from 34 cents

April 18, 2003|By BLOOMBERG NEWS

HOFFMAN ESTATES, Ill. - Sears, Roebuck & Co., the largest U.S. department-store chain, said yesterday that its first-quarter profit increased 75 percent because of lower acquisitions costs, but sales fell and the retailer expects the decline to continue in the current quarter.

Net income rose to $192 million, or 60 cents a share, from $110 million, or 34 cents, in the first quarter last year when the company incurred $209 million in writing down some assets. Revenue dropped 1.7 percent to $8.88 billion, Sears said in a statement.

The retailing operation had a loss, while profit fell at the company's finance unit. The introduction of clothing by Lands' End, acquired by Sears in June, failed to halt a 19-month slide in sales at stores open a year. Chief Executive Officer Alan J. Lacy is counting on Lands' End to end the decline while he seeks a buyer for the credit-card unit, a strategy some investors consider risky.

"Sears is still on the lower end of the consumer totem pole," said David Abella, an analyst at Rochdale Investment Management, which oversees about $900 million in assets and sold its Sears shares in October. "They still have their work cut out for them."

Profit from the finance unit, which accounts for almost two-thirds of earnings, fell 11 percent because Sears had to set aside more funds to cover unpaid bills. Sears put the business up for sale last month. Investor concern about rising credit-card delinquencies sliced about $5 billion in market value from the retailer after it starting increasing reserves in October.

The retailer said its earnings will be 85 cents to $1 a share in the second quarter and $4.95 to $5.15 a share this year, excluding any costs from selling the finance business.

Sears' shares slipped 1 cent to close at $26.63 on the New York Stock Exchange. They had tumbled 51 percent in the past year.

Baltimore Sun Articles
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.