TORONTO, ON - January 29, 2004 – Sears Canada Inc. (TSX: SCC) today announced its unaudited fourth quarter and full year results. Earnings for the 53 week period ended January 3, 2004, excluding non-comparable items, were $140.9 million or $1.32 per share compared to $138.7 million or $1.30 per share for the 52 week period ended December 28, 2002. Including non-comparable items, the Company recorded net earnings of $134.7 million or $1.26 per share compared to $52.2 million or 49 cents per share last year.
Total revenues for the 53 weeks were $6.223 billion compared to $6.536 billion for last year's 52 week period, a decrease of 4.8%. On a comparable week basis, total revenues decreased 5.9%. Same store sales decreased 4.6%.
Commenting on Sears Canada's full year performance, Mark A. Cohen, Chairman and Chief Executive Officer, stated: "Although 2003 results were not up to our expectations, our operating earnings improved as a result of careful expense, gross margin, and inventory management. Expenses for the year were reduced by more than $90 million from the comparable period last year. Gross margins improved by 40 basis points. Inventory levels ended on plan and are substantially more current than a year ago."
Earnings for the 14 week period ended January 3, 2004, excluding non-comparable items, were $102.6 million or 96 cents per share, compared to $95.3 million or 89 cents per share for the 13 week period ended December 28, 2002. Including non-comparable items, the Company recorded net earnings of $96.9 million or 91 cents per share compared to $143.4 million or $1.34 per share in the quarter last year.
Total revenues for the quarter were $2.039 billion compared to $2.057 billion in the quarter last year, a decrease of 0.9%. On a comparable week basis, total revenues declined 4.7%. Same store sales decreased 1.3%.
Commenting on the quarter, Mr. Cohen said, "We are very pleased with our results in the quarter. Though total sales were negative, largely a result of a very challenging November, sales were, as recently reported, significantly improved in December. While gross margins were under pressure in the quarter, strong expense disciplines throughout the Company enabled us to improve our operating earnings by almost 8% in the quarter compared to last year."
With respect to the Company's outlook for 2004, Mr. Cohen stated, "We believe our underlying sales trends have begun to improve, as demonstrated by our positive comparable store sales improvements in August, September and December. Comparable store sales for 2004 are planned to increase at a low single-digit rate. Gross margin improvements and expense management efforts will continue to be an important feature of our 2004 plan. As a result, operating income is expected to increase at a mid-teen rate. We continue to factor customers' increasingly aggressive value orientation into our thinking. On a more ebullient note, our recent certification as a Schedule I Bank will enable us to further expand our successful Sears MasterCard program across the country as we begin to explore the development of new and exciting financial services."
This release contains discussion of forward-looking information and potential future circumstances and developments. The discussion of such matters is qualified by the inherent risks and uncertainties surrounding future expectations generally, and may materially differ from the Company's actual future experience.
Sears Canada is a multi-channel retailer with a network of 122 Full-Line stores, 47 Sears Home stores, over 2,200 catalogue merchandise pick-up locations, 144 dealer stores, 14 outlet stores, 51 floor covering centres, 49 auto centres, 110 Sears Travel offices and a nationwide maintenance, repair, and installation network. The Company also publishes Canada's most extensive general merchandise catalogue and offers shopping online at www.sears.ca.
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