Sears Canada reports higher profit in 4Q despite sales dip
By Michael J. Knell -- Furniture Today, March 9, 2008
Toronto — Profitability improved for Sears Canada during the fourth quarter of 2007 even though revenue and same-store stores fell.
Total revenues for the extended 18-week period ended Feb. 2 were C$2.3 billion and net earnings were C$138.4 million or C$1.29 per share.
A few weeks ago, the multi-channel retailer announced that it was altering its fiscal year to coincide with that of its largest shareholder, U.S.-based retailer Sears, Roebuck & Co. The fiscal year now ends on the Saturday closest to the end of January rather than on the Saturday closest to the end of December, accounting for the extra month tacked on to the latest year's final period.
In the 2006 fourth quarter, revenue was C$1.9 billion and earnings came to C$108.5 million or C$1.01 per share.
When the 13 weeks ended Dec. 29, 2007, are measured against the comparable 2006 period, revenues decreased 3.4% and same-store sales slipped 2.4%. But the company said that EBITDA (earnings before interest, taxes, depreciation and amortization) increased 10.9% for the period while net earnings rose 8.5%.
"Our results are strong and we were able to offset the impact of cross-border shopping in the U.S. in the first half of the quarter," Dene Rogers, Sears Canada president and CEO, said in a statement. "Our associates met the challenges before them and provided our customers with exceptional value throughout the holiday shopping season."
Revenues for the 57-week year ended Feb. 2 were C$6.3 billion and net earnings were C$308.5 million or C$2.87 per share.
For the 52-week year ended Dec. 20, 2006, revenues came to C$5.9 billion and earnings were C$152.6 million or C$1.42 per share.
For the comparable 52-week period ended Dec. 29, 2007, revenues fell 1.5% while same-stores sales slipped 0.8%. EBITDA increased by 8.6% while comparable net earnings jumped 88.6%.
While same-store sales rose 1.9% in the first half of 2007 they declined 2.9% in the second half, affected by "the strong Canadian dollar, which caused a significant increase in cross-border shopping in the U.S.," the company said.
| Sears Canada (a) | |||
|---|---|---|---|
| Earnings per share are fully diluted, and all figures in parentheses are losses or declines. | |||
| Quarter ended 2/2 (b) | 2008 | 2006 | Change |
| (a) In Canadian dollars. (b) Because of a change in fiscal year, the 2008 quarter had 18 weeks and the 2008 year had 57 weeks. They are compared to the 13-week period and 52-week year ended Dec. 30, 2006. (c) Includes C$4.2 million in expenses from unusual items in the 2008 quarter, mainly for environmental remediation; an C$82.2 million gain from unusual items in the 2008 year, mainly from sale of real estate; and a C$25.2 million restructuring expense in the 2006 year. |
|||
| Revenues | C$2,295,800,000 | C$1,874,000,000 | 22.5% |
| Operating income | 259,200,000 | 199,300,000 | 30.1% |
| Net income (c) | 138,400,000 | 108,500,000 | 27.6% |
| Earnings per share | 1.29 | 1.01 | 27.7% |
| Year ended 2/2 (b) | 2008 | 2006 | Change |
| Revenues | C$6,326,400,000 | C$5,932,800,000 | 6.6% |
| Operating income | 542,600,000 | 464,500,000 | 16.8% |
| Net income (c) | 308,500,000 | 152,600,000 | 102.2% |
| Earnings per share | 2.87 | 1.42 | 102.1% |
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