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Sears Q2 Sales Dip 1%, Majors Lauded

7/18/2001 09:09:00 AM Eastern

Hoffman Estates, Ill. - Heralding 'strong growth' in major appliances, contrasted with 'decreases' in electronics and air conditioners, Sears, Roebuck and Co. reported retail sales for the second quarter that were 1.1 percent below the same quarter in 2000.

Retail revenues were $7.80 billion in the three months, compared with $7.89 billion in the year-ago period. Retail operating income was $213 million in the second quarter ended June 30, down from the $225 million reported in the same three months in 2000.

'The difficult economic environment and cooler-than-anticipated weather negatively impacted both our hardlines and softlines businesses within the full-line stores,' said Alan J. Lacy, chairman/CEO. 'In hardlines, we experienced strong growth in major appliances and solid growth in lawn and garden sales, offset by decreases in electronics, home office, air conditioners and seasonal sporting goods.'

Retail gross margin rates at Sears enjoyed a 60-basis-point hike to 26.7 percent during the second quarter. However, retail selling and administrative spending as a percent of sales did not fare as well, rising 60 basis points to 21.5 percent in the second quarter, compared with 20.9 percent in the year-ago three months.

Looking ahead, Lacy said that, 'While the current retail climate remains challenging, we are forecasting full-year earnings per share to be in line with last year, excluding non-comparable items and net securitization income. In addition, we will continue to take actions to improve the longer term strategic positioning of the company.

For the six months, retail revenues were relatively flat, coming in at $14.61 billion for the period, compared with $14.72 billion in the same six months in 2000. Retail operating income was $157 million for the six months, compared with $246 million in the year-ago period.

Revenues for merchandise sales and services at Sears dipped less than 1 percent to $8.88 billion in the second quarter, down from $8.90 billion in the same three months last year.

However, the company reported an overall net loss of $197 million, compared with a gain of $388 million in the same quarter in 2000.

For the six months, merchandise sales and services revenues were flat, hitting $16.63 billion, compared with $16.64 billion in the same six months last year.

Sears reported an overall net loss of $21 million for the six months, compared with a $623 million gain in the same six months in 2000.