Sears Canada sees gain in sales, earnings

Special promotions pay off in third quarter

Furniture Today Staff -- Furniture Today, November 21, 2008

TORONTO — Sears Canada reported a slight gain in revenues and a 47.4% jump in earnings, excluding unusual items, in the 13-week fiscal third quarter ended Nov. 1.

Revenues of C$1.4 billion for the period were up 0.6% from the comparable calendar period in 2007, with same-store sales up 0.9%, according to the company, which is Canada's largest home furnishings retailer.

Net earnings of C$68.9 million were down from C$104 million in last year's third quarter, but the 2007 amount included a one-time, C$58 million pretax gain on the sale of real estate. The recent period also included a one-time gain of $1.1 million regarding restructuring activities.

Excluding both of the one-time gains, earnings in the latest period were $67.4 million or 63 cents per share, up from $46 million or 44 cents per share in the 2007 period.

Operating earnings before interest, taxes, depreciation and amortization, and before the unusual items, rose 20.6% to $129.7 million.

"We were pleased to increase same-store sales, considering the difficult economic period being experienced in Canada with the lowest consumer confidence index in more than 25 years," said Dene Rogers, president and CEO. He said the company drew consumers with promotions including its Budget Relief Price Drop program, to help customers "stretch their household spending dollars in these uncertain times."

For the first three quarters of the fiscal year, Sears Canada's revenues were up 2.1% to C$4.1 billion. Earnings, excluding unusual items, rose 75.3% to C$163.7 million or C$1.52 per share.