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Sears 3Q profit falls 10%
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October 21, 1999: 9:49 a.m. ET
No. 2 retailer slumps amid sour summer months, but results beat estimates
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NEW YORK (CNNfn) - Sears Roebuck & Co. posted a 10-percent drop in third-quarter operating income Thursday -- but topped analysts' targets -- after sluggish months for retailers in July and August.
The Hoffman Estates, Ill.-based company, the nation's No. 2 retailer, said earnings before one-time items were $429 million, or 69 cents a diluted share, in the quarter ended Oct. 2, down from $477 million, or 76 cents a share, a year earlier.
The consensus analyst estimate, as compiled by the research firm First Call, was for Sears to report earnings of 64 cents per share.
The results don't include $29 million in one-time charges for job cuts and Sears' exit from some auto markets. In the third quarter of 1998, Sears took a charge of $254 million related to the sale of its Western Auto business and paying off debt.
Including those charges, Sears said net income was $236 million, or 62 cents per diluted share, compared with $44 million, or 11 cents per share.
Revenue fell 3 percent to $9.5 billion.
"While we are clearly not satisfied with overall performance for the quarter, we are encouraged by the September improvements in retail sales and gross margin," said Chairman and Chief Executive Officer Arthur Martinez. "In addition, our credit business is solid, and Sears Canada has experienced outstanding results."
Sears said seasonal factors hurt sales of home improvement items, but said sales of appliances and electronics were strong and drove a 1.8 percent rise in sales for stores open a year or more.
In the first nine months of the year, Sears earned net income of $713 million, or $1.86 per share, up from $513 million, or $1.30 per share, a year earlier. Revenue fell 3 percent to $28.6 billion.
Shares of Sears Roebuck (S), one of 30 stocks included in the Dow Jones industrial average, fell 3/16 to 29 Wednesday.
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Sears
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