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.