HOFFMAN ESTATES, ILL. - Claiming solid sales growth in hardlines, including such categories as major appliances and consumer electronics, Sears, Roebuck and Co. increased its fourth-quarter revenue in its merchandise and services sector by 3.1 percent.
Sales in the sector, which include Sears stores, hit $11.2 billion for the three months ended Dec. 30, compared with $11 billion in the year-ago three months. Domestic comp-store sales for the quarter grew by 0.9 percent.
Fourth-quarter net income, however, nose-dived 40.3 percent to $442 million, down from $740 million in the same three months in 1999. Excluding non-comparable items, fourth-quarter net income would have been $639 million, compared with $740 million in the same quarter last year. The non-comparable items include a charge for store closings.
Increased promotional intensity in North America led to a 110-basis-point decrease in gross margin during the fourth quarter, compared with the same three months last year. Selling and administrative expense as a percentage of total revenue was 20 percent in the quarter, up 40 basis points from the year-ago fourth quarter.
Sears, which attributes what it calls an unfavorable retail comparison to last year's strong quarter, as well as soft holiday-season sales in 2000, expects a challenging year in 2001, particularly the first half. Chairman/CEO Alan J. Lacy said, "We are focused on delivering solid profit growth for the year. Operating income is planned to deliver mid-single-digit growth."
Sears' merchandise and service sector revenue climbed 3.7 percent in 2000, hitting $41 billion, compared with $39.5 billion in 1999. Net income for the year was down 7.6 percent to $1.3 billion, compared with $1.5 billion in 1999.