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Sears Canada’s 1Q earnings plummet 85%

Michael J. Knell -- Furniture Today, June 8, 2009

TORONTO — First-quarter earnings for Sears Canada plunged 85% as the multi-channel retailer’s revenues fell 11% for the 13-week period ending May 2.

Net earnings were C$10.3 million or 10 cents per share, compared to C$70.8 million of 66 cents per share for the same period last year. Revenues of C$1.12 billion were down from C$1.25 billion in the comparable 2008 period as same-store sales fell 10.4%.

Earnings before interest, taxes, depreciation and amortization (EBITDA) also fell in the first quarter, to C$62.3 million from C$94.4 million in the same period last year.

“The economic recession deepened during the first quarter, unemployment increased to 8% and the Consumer Confidence Index averaged 22 percentage points below last year,” Sears Canada President Dene Rogers said in a statement.

“Considering the economic conditions, Sears delivered solid results and I commend our 33,000 associates for their contribution to these results,” he continued.

Rogers added that the retailer plans to introduce several new measures to improve performance over the coming weeks. Among them are an improved and expanded gift registry program; a no-fee travel loyalty point redemption program; the launch of Liz and Co., a new brand from Liz Claiborne; and measures to reduce product returns by providing higher levels of customer service.

Sears Canada (a)
Earnings per share are fully diluted, and all figures in parentheses are losses or declines.

13 weeks ended 5/2	2009	2008	Change
(a) In Canadian dollars (b) Includes a one-time pretax gain on the sale of real estate of C $37.2 million in the 2008 quarter.
Revenues	C$1,116,500,000	C$1,254,400,000	(11.0%)
Operating income	53,000,000	94,400,000	(43.9%)
Net income (b)	10,300,000	70,800,000	(85.5%)
Earnings per share	0.10	0.66	(84.8%)

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