TORONTO — Department store operator Sears Canada Inc. (TSX:SCC) reported a 28 per cent drop in fourth-quarter profit during a “disappointing” period that saw sales hampered by consumers indisposed to spend on big-ticket items as mounting debt eroded their disposable income.
The retailer, which is majority owned by U.S. parent Sears Holdings, said Wednesday its net earnings for the quarter declined to $92.2 million or 87 cents per share from a year-earlier $128.2 million or $1.19 per share.
“The 2010 results were disappointing due to several external factors including increasing household debt, at an all time high, which affects sales in major expense items such as appliances, the effect of a warm fall that impacted apparel and categories such as snowblowers, and continued deep discounting by the industry in general,” president and CEO Dene Rogers said in a statement.
“Nevertheless, we take responsibility for our results and are committed to improving our performance in 2011.”
Revenues for the quarter, which contained 13 weeks for accounting purposes, were down 3.2 per cent to $1.48 billion, while same-store sales fell 3.3 per cent.
For the full year, Sears Canada reported revenue of $4.96 billion, compared to $5.2 billion in the prior year. Same-store sales were down four per cent. Net earnings for the year ended Jan. 29 were $149.8 million or $1.40 per share versus $234.7 million or $2.18 per share a year before.
Sears Canada has a network of 197 corporate stores, 241 dealer stores, 31 home improvement showrooms, over 1,800 catalogue merchandise pick-up locations across Canada. It also has 108 Sears Travel offices and a countrywide home maintenance, repair and installation network.
Its shares were down 23 cents at $19.97 in midday trading on the Toronto stock market.