Sears Sales and Profit Decline in Q4

Hoffman Estates, Ill., In the fourth quarter ended Jan. 1, Sears’ profits had nowhere to go but down. The chain posted net income of $378 million, a far cry from $2.7 billion in the year-ago quarter, when the sale of the chain’s credit-card business boosted net income dramatically. Merchandise sales and services revenues for the 2004 fourth quarter were $9.6 billion, compared with $10.2 billion in the prior-year period, which contained an extra week.

“Fourth-quarter earnings and revenues met our expectations, with control of costs and expenses offsetting margin pressure,” said chairman and CEO Alan J. Lacy. “As we forecasted in October, domestic comparable-store sales were flat during the fourth quarter, with sales increases in October and November offset by a decline in December. The year was marked by further restructuring and repositioning of our core retail business, which slowed short-term results, but positions us well for the future.”

Sears is preparing for its merger with Kmart Corp. to take effect early this year, creating the third-largest U.S. chain, in terms of sales, behind Wal-Mart Stores and The Home Depot.