NEW YORK -- The changes implemented in the last year are paying off in a big way for Sears, Roebuck & Co., as the retailer reported merchandising income jumped 62.7 percent in the fourth quarter ended Dec. 31, and increased nearly five-fold in the...
NEW YORK -- The changes implemented in the last year are paying off in a big way for Sears, Roebuck & Co., as the retailer reported merchandising income jumped 62.7 percent in the fourth quarter ended Dec. 31, and increased nearly five-fold in the year.
Merchandising income in the quarter rose to $213.6 million from $131.3 million a year ago.
The Sears Merchandise Group, which includes merchandising, credit and international operations, posted net income of $310.3 million in the quarter, up from the year-ago comparable figure of $245.8 million. After a restructuring charge of $1.7 billion and a $46.1 million loss from the exited catalog business, Sears Merchandise Group had a loss of $1.46 billion in the 1992 quarter.
Credit income in the quarter slumped 22.5 percent, to $77.8 million from $100.4 million, reflecting higher interest expenses and a slightly higher provision for uncollectible accounts. International profits advanced 34 percent, to $18.9 million from $14.1 million.
Sales in the quarter excluding exited businesses rose 10.9 percent. Including exited business in the year-ago total, however sales declined 5.5 percent, to $9.3 billion from $9.8 billion.
Results were in line with Wall Street estimates and reflected the ongoing turnaround at the Merchandise Group.
Walter Loeb of Loeb Associates said much of the credit for the success goes to the remerchandising efforts installed by Arthur Martinez, chief executive officer of the Merchandise Group, and Robert L. Mettler, president of apparel.
"They are just now gaining merchandising acceptance, so I think there is a lot more to come." Loeb said. "I am looking for very strong performance in 1994."
In the full year, merchandise earnings came to $303.9 million, substantially ahead of $63.7 million earned a year earlier. Credit income grew 7.7 percent, to $439.6 million from $408.3 million. International earnings fell to $8.1 million from $29.4 million, but the year-ago period included a non-recurring gain of $49.7 million related to the sale of a minority interest in Sears Mexico.
Bottom-line earnings for Sears Merchandise Group in the year came to $751.6 million, which compares with 1992 earnings of $451.7 million before special charges. A total of $3.5 million in non-recurring charges related to restructurings, changes in accounting methods and losses from exited businesses resulted in a net loss of $2.98 billion for the Merchandise Group in 1992.
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