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Sears Q3 Retail Sales Dip 1%

10/17/2002 12:24:00 PM Eastern

Hoffman Estates, Ill. - Sears , Roebuck and Co. reported that revenue for the third quarter in retail and related services, which includes full-line stores, dipped 0.7 percent, to $7.26 billion, from $7.31 billion the previous year.

The third quarter revenue decreases in full-line Sears, Roebuck and Co. stores reflect, in part, decreases in hardlines revenue - with increases in home appliance sales being offset by decreases in home electronics, home office and home improvement.

Operating income for the Retail segment, excluding non-comparable items, dropped to $42 million in the three months ended Sept. 28, compared with $82 million in the year-ago period. However, gross margin rate improved by 180 basis points, to 27.5 percent, with hardlines contributing to the margin improvement, said Sears.

Selling and administrative expenses for the retail division were 24.1 percent of sales in the third quarter, 190 basis point higher than the 22.2 percent registered in the same period in 2001.

Sears said it continues to expect comparable earnings increases for its retail segment in the low- to mid-30 percent range.

For the nine months, sales in the retail segment were flat, coming in at $21.7 billion, compared with $21.9 billion in the same period in 2001. Operating income in the segment, excluding non-comparable items, climbed to$429 million in the nine months, up from $239 million year-on-year.

Weighed down by non-collectible credit card debt, and the resulting drop in operating income at its Credit and Financial Products division, Sears posted an overall 29.7 percent decrease in operating income, down to $275 million for the third quarter, compared with $391 million in the same period last year. Third quarter net income was $189 million, compared with $262 million year over year.

Overall Sears revenue dipped 0.6 percent in the third quarter, down to $9.67 billion, compared with $9.73 billion in the same three months in 2001.

For the nine months, total Sears revenue reached $28.85 billion, up 0.3 percent from the $28.77 billion recorded in the same nine months in 2001. Net income for the nine months jumped to $528 million, compared with $241 million year over year.

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