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Sears Q3 Retail Segment Sales Dip 1.8%

10/24/2001 09:49:00 AM Eastern

Hoffman Estates, Ill. - Strong growth in major appliances was not able to offset declines in other hard goods and soft goods categories, forcing Sears, Roebuck and Co. to post a 1.8 percent third-quarter decline in revenue for its Retail and Related Services segment.

Sales dropped to $7.33 billion, down from $7.47 billion in the same three months in 2000.

The gross margin rate in the Retail and Related Services segment improved by 30 basis points to 25.6 percent in the third quarter ended Sept. 30, while selling and administrative expenses climbed 10 basis points to 22.1 percent of sales. The retail segment posted operating income of $82 million, compared with $69 million in the same quarter last year.

For the nine months, revenue in the Retail and Related Service segment dropped to $21.9 billion, down from $22.2 billion in the same quarter last year. Operating income in the segment for the nine months decreased to $239 million, down from $315 million in the same period in 2000.

Sears, which has announced plans for nearly 5,000 salaried job cuts, expects to double profits in its Retail and Related Services segment by 2004, saving $600 million. The retailer anticipates that cost-cutting measures will increase profits by more than $400 million in the next three years. However, the company said there will be related charges, but did not release amounts.

Overall Sears sales rose to $9.75 billion in the third quarter, compared with $9.59 billion a year ago. Net earnings were $262 million, down from $278 million year over year.