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No Surprises at Sears

3Q income drop was expected; same-store sales gained



Sears, Roebuck and Co. (Hoffman Estates, Ill.) announced that its 22 percent drop in net income for its third quarter ended Sept. 27, 2003, was “in line with our expectations.”

The retailer's earnings included a pretax charge of $141 million related to the company's previously announced refinement of its business strategy for The Great Indoors.

Revenues for the quarter gained 1.1 percent, primarily due to the 1.2 percent increase in domestic same- store sales. The retailer announced that in the home group, the lawn and garden and fitness businesses continued to experience strong performances across all formats, while home appliances showed solid improvements in the quarter. Within apparel (and accessories), improved merchandise offerings resulted in comparable store sales increases in the women's ready-to-wear, men's and footwear categories.

“We are pleased with our return to sales growth following two years of a fundamental repositioning and restructuring of our core business,” said chairman and ceo Alan Lacy. “While we have much still to do, we believe the business is well-positioned for profitable growth.”

Lacy also expressed pleasure with the retailer's Lands' End and Covington brands. “We completed the roll-out of Lands' End merchandise to another 470 stores during the month of September and now carry the brand in all of our full-line stores nationwide,” he said. “We continue to see a broader sales improvement provided by our Lands' End brands in Sears' full-line stores, as comparable store apparel sales for stores carrying the merchandise out-performed those without. Overall sales trends improved during the quarter, reflecting continuing progress against our goals of upgrading merchandise offerings, enhancing the customer experience and improving our marketing efforts.”

During 2003, Sears has opened 22 stores, consisting of two full-line stores, 19 specialty stores and one Lands' End outlet store. It has closed 15 stores, consisting of five full-line stores and 10 specialty stores.




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