Sears Canada profits up 83.6% in 3Q
By Furniture Today Staff -- Furniture Today, October 26, 2003
Toronto — Sears Canada reported third-quarter revenues of C$1.4 billion, down 3.2% from C$1.5 billion in the comparable 2002 quarter. Profits for the quarter skyrocketed 83.6% to C$13.4 million compared with C$7.3 million a year ago.
Canada's largest single retailer and No. 1 seller of furniture and bedding recorded a C$1.3 million after-tax gain in the current quarter related to the sales of receivables. This contrasts with a C$2.9 million after-tax loss on the sale of receivables reported for the comparable 2002 quarter.
Same-store sales increased 1.3% in the quarter.
Mark Cohen, chairman and chief executive officer, said, "Sales improved significantly in the third quarter, particularly in August and September.... Same-store sales increases were 3.5% in August and 5.3% in September."
He said a widespread power outage during the quarter and the week-long effort to restore full power to the Ontario stores had cost Sears Canada an estimated C$15 million in sales and affected earnings by three Canadian cents per share.
In the first nine months of the year, revenues of C$4.2 billion were down 6.6% from C$4.5 billion in the comparable 2002 period. Same-store sales decreased 6.2%.
Net income year-to-date was C$37.8 million, compared with a net loss of C$91.2 million for the initial nine months of 2002. Profits in the year-ago period were affected by pretax charges of C$180 million for the conversion of former Eatons stores and C$3.2 million for the conversion of call centers. Those charges were partially offset by a C$3.6 million pretax gain on the sale of an airplane.
Looking ahead, Cohen said, "Although we have acquired some positive momentum in the quarter as we had forecast, the consumer is still exhibiting some reluctance and the competitive environment remains problematic, which at the least will likely put tremendous pressure on margins for the balance of the year.... Our guidance for the full year is operating earnings in the range of C$1.40 to C$1.60 per share."
| Sears Canada(a) | |||
|---|---|---|---|
| Earnings per share are fully diluted, and all figures in parentheses are loses or declines. | |||
| 13 weeks ended 9/2720032002Change | |||
| (a) In Canadian dollars. (b) Based on average shares outstanding of 107.1 million in the 2003 periods, 107 million in the 2002 13 weeks and 106.7 million in the 2002 39 weeks. (c) Includes a C$180 million pretax charge for the Eatons conversion, a C$3.2 million pretax charge for call center converion and a C$3.6 million pretax gain on the sale of an airplane. |
|||
| Revenues | C$1,433,300,000 | C$1,481,100,000 | (3.2%) |
| Operating income | 80,700,000 | 68,900,000 | 17.1% |
| Net income | 13,400,000 | 7,300,000 | 83.6% |
| Earnings per share (b) | 0.12 | 0.07 | 71.4% |
| 39 weeks ended 9/27 | 2003 | 2002 | Change |
| Revenues | C$4,183,600,000 | C$4,479,100,000 | (6.6%) |
| Operating income | 230,300,000 | 218,600,000 | 5.4% |
| Net income | 37,800,000 | (c)(91,200,000) | — |
| Earnings per share (b) | 0.35 | (0.85) | — |
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