Retailer Sears, Roebuck and Co. reported today net income, excluding noncomparable items of U.S. $1.6 billion, or $4.92 per share for 2002 as compared to $4.22 in 2001, a 17 -percent per share increase. On a reported basis, net income was $1.4 billion or $4.29 per share for 2002 as compared to $2.24 the previous year. Non-comparable items are detailed in a schedule at the end of this release.
"2002 was a year of tremendous change for Sears," said Alan J. Lacy, Sears chairman and CEO. "We made significant progress in repositioning and restructuring our core retail business, full-line stores, resulting in improved earnings for Sears. 2002 was a record year for Sears in terms of earnings per share."
Fourth Quarter Earnings
The company also reported fourth quarter 2002 net income, excluding non- comparable items, of $669 million, or $2.11 per share compared to $657 million, or $2.02 per share in 2001, a 4.5-percent per share increase. The retailer said the increase is due to improved profitability in the company's Retail and Related Services segment as well as a decrease in the number of shares outstanding, partially offset by a decline in the Credit and Financial Products segment.
"Despite a challenging retail environment and soft sales, we made strong progress in improving our core retail operations," said Mr. Lacy. "The acquisition of Lands' End, continued improvement in merchandise assortments, inventory management and vendor sourcing, and an improvement in the cost structure of the full-line stores all contributed to increased profitability."
Fourth quarter of 2002 was affected by one non-comparable item -- the gain on the sale of the company's remaining investment in Advance Auto Parts, Inc. The sale resulted in an after-tax gain of $179 million, or $0.56 per share and generated after-tax cash proceeds of $335 million. Non-comparable items affecting the fourth quarter of 2001 consisted of charges relating to implementation of productivity initiatives, product category exits, and the Exide battery litigation settlement. These non-comparable items, on an after- tax basis, were $163 million, or $0.50 per share.
Reported fourth quarter 2002 net income, including the non-comparable items, was $848 million or $2.67 per share, compared with $494 million, or $1.52 per share in the fourth quarter of 2001.
The company's preliminary outlook for 2003 is for comparable earnings per share to increase in the low- to mid- single digits. The Retail and Related Services business is expected to grow operating income in the mid-teens, while operating income for the Credit and Financial Products segment is expected to decline at a low- to mid-single-digit rate. Sears Canada is anticipated to post increased year- over-year profitability, and the Corporate and Other segment is expected to remain relatively flat with productivity savings being offset by higher benefit and insurance costs.
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