Sears, Roebuck & Co. (Hoffman Estates, Ill.) reported weak retail sales and increased reserves for bad credit-card debt cut into its first-quarter profits. The largest U.S. department store chain also warned that full-year earnings would be below analysts' estimates.
Sears reported a net income of $192 million, compared with $110 million a year earlier. The increase is attributed to a year-earlier quarter that included charges for an accounting change and conversion of Eatons stores in Canada to the Sears Canada name.
However, Sears, which operates about 870 department stores in the U.S., reported a first-quarter revenue of $6.6 billion, down 1.8 percent from last year. The report came a week after Sears reported its 19th straight month of declining same-store sales and forecast April sales would be down in the mid-single digits.
While the retailer joins others in struggling with lackluster consumer confidence and a bearish stock market, Sears is also struggling with the sale of its credit card business, which it put up for sale last month. The $30 billion credit card portfolio, which last year generated about two-thirds of Sears' profits, was battling with consumers unable to pay their bills and a jump in personal bankruptcies.