Sears, Roebuck and Co. is starting to get the push it needs from Lands' End, which helped Sears realize improved fourth-quarter profitability both corporate-wide and in its retail segment, the company said. "We're pleased with Lands' End's performance. It exceeded our expectations," Sears tells InternetRetailer.com.
In its year-end 2002 financial statement, Sears reported fourth-quarter net income of $848 million on $12.5 billion revenue, compared to $494 million on $12.2 billion in revenue in the year-ago period. Sears attributed much of the increase in profits to improved financial performance in its Retail and Related Services division, which was largely helped by sales of Lands' End products in stores and online. "Despite a challenging retail environment and soft sales, we made strong progress in improving our core retail operations," said Sears CEO Alan J. Lacy. "The acquisition of Lands' End, continued improvement in merchandise assortments, inventory management and vendor sourcing, and an improvement in the cost structure of the full-time stores all contributed to increased profitability."
Retail and Related Services revenue for the fourth quarter reached $9.7 billion, up 2.8% from $9.5 billion a year ago. The company said the gross margin rate for the Retail and Related Services rose 140 basis points to 29.4%, due to the inclusion of Lands' End and improved inventory management and product sourcing in full-line stores.
Although Sears doesn't break out financial numbers for e-commerce sales, the company showed a profit from e-commerce operations in the fourth quarter, continuing a pace set earlier last year, the spokesman says.
The company's fourth-quarter net income included a one-time after-tax gain of $179 million from the sale of Advance Auto Parts Inc. Without this and other one-time gains and charges, Sears posted Q4 net income of $669 million, up 1.8% from $657 million a year ago.
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