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Sears Q2 Retail Segment Net Up, Sales Dip

7/18/2002 10:00:00 AM Eastern

Hoffman Estates, Ill. - Increased sales in hardline goods, like major appliances, helped Sears offset lower sales in other product areas within its retail and related services segment during the second quarter.

However, retail segment sales still edged downward less than 1 percent, to $7.7 billion in the three months, compared with $7.8 billion in the year-ago period. However, the sales dip did not effect profitability notching an $87 million increase to $300 million for the quarter ended June 29, from the $213 million reported in the second quarter of 2001.

Margin in Sears' retail segment improved by 30 basis points during the second quarter, reaching 27.2 percent. Full-line hardline goods were among the businesses contributing to the margin improvement.

At the same time Selling, General and Administrative (SG&Q) expenses in the segment were 3.6 percent lower than the second quarter in 2001, mainly due to expense decreases in full-line stores. SG&A was 21 percent in the second quarter, down 60 basis points from the 21.6 percent reported in the same three months last year.

Total revenue at Sears in the second quarter decreased less than 1 percent, to $10.14 billion, compared with $10.18 billion in the same quarter in 2001. Thanks to improvements in the company's retail and credit businesses, it reported a net income of $420 million in the second quarter, compared with a $197 million loss in the same three months last year.

For the six months, total revenue edged up nearly 1 percent, to $19.2 billion, compared with $19 billion year over year. Net income for the six months was $339 million, up from a loss of $21 million in the same period last year.