Sears Holdings Corp. on Thursday said fourth-quarter income fell 13 percent as full year earnings dropped 43.4 percent.


For the three months ended Jan. 29, income attributable to Sears declined to $374 million, or $3.43 a diluted share, from $430 million, or $3.74, a year ago. The company said adjusted diluted earnings per share were $3.67 in the current quarter, or 10 cents ahead of Wall Street’s consensus estimate, versus $3.69 last year. Adjusted EPS includes a $32 million gain in connection with the settlement of the Visa/MasterCard antitrust litigation.


Revenues inched down 0.8 percent to $13.14 billion from $13.25 billion. By name plate, Kmart sales hit $4.92 billion and sales at Sears U.S. stores reached $6.89 billion. Sears Canada sales were $1.44 billion.


Comparable-store sales declined 1.2 percent with a 2.5 percent gain at Kmart offset by a 4.5 percent drop at Sears’ U.S. stores.


The company said the comp gain at Kmart was driven by increases in the apparel, footwear, jewelry, sporting goods and toy categories, balance against declines in the food and consumables and pharmacy categories.  The decline at Sears U.S. stores was primarily attributable to apparel and hardlines.  In contrast, Sears’ footwear, jewelry, and automotive categories saw growth in the quarter.


The company, which appointed Lou D’Ambrosio president and chief executive officer on Wednesday, said merchandise inventories at the end of the year were $9.1 billion compared with $8.7 billion a year ago.  The increase was primarily in Kmart apparel, electronics, toys, footwear and sporting goods categories.


For the full year, earnings were $133 million, or $1.19 a diluted share, versus 235 million, or $1.99, in 2009. Revenues dipped 1.6 percent to $43.33 billion from $44.04 billion.


At the end of the year, the company operated 1,307 Kmart locations, as well as 894 full line Sears U.S. stores and 1,354 Sears U.S. specialty stores. It also operated 122 Sears Canada full-line stores and 361 Sears Canada specialty stores.

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