Essay About First Quarter Of Last Year And Softlines Businesses

Sears New Release
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Sears Updates Segment Reporting; Adopts New Accounting Standard
Resulting In One-Time Non-Cash Charge Of $520 Million In Second Quarter
HOFFMAN ESTATES, Ill., April 12 /PRNewswire/ — Sears, Roebuck and Co.
(NYSE: S) announced total domestic store revenues for the five weeks ending
April 7, 2001 were $2.56 billion. Comparable domestic store revenues
decreased 5.3 percent. Total domestic store revenues decreased 5.1 percent
compared with $2.7 billion for the five weeks ending April 8, 2000.
“March retail sales fell below expectations, with the slowing economy and
colder than anticipated weather having an impact on both our hardlines and
softlines businesses,” said Chairman and Chief Executive Officer Alan J. Lacy.
“Weather-related seasonal apparel and lawn and garden merchandise accounted
for over one-third of the comparable store sales decline. Among the better
performing businesses was Home Appliances, which continues to gain market
share. The Great Indoors format and sporting goods businesses also performed
well.”
Sears, Roebuck and Co.
5 Weeks 9 Weeks
2001 Domestic Store Revenues $2,563,400,000 4,530,800,000
2000 Domestic Store Revenues 2,701,000,000 4,697,600,000
Percent Change (5.1)% (3.6)%
Comparable Domestic Stores Percent Change (5.3)% (3.9)%
Preliminary Earnings Announcement
The company anticipates that earnings per share for the first fiscal
quarter of 2001, ended March 31, will be approximately $0.53, versus $0.65 in
the first quarter of last year.
In the first quarter, the credit business performed in line with
expectations, reflecting continued strong portfolio quality. However,
operating income from the credit business for the first quarter will be
slightly below last year, mainly due to lower revenues. The domestic retail
business did not meet the companys expectations in the first quarter due to
sales and margin shortfalls resulting from the slowing economy and cooler than
expected spring weather in much of the country.
Sears Revises Segment Reporting
FASB Statement No. 131 prescribes accounting guidance for segment
reporting and requires that a companys externally reported segments be
consistent with its internal management structure. Consequently, effective
for the first quarter of 2001, Sears is modifying its externally reported
segments to reflect the companys integrated retail and related services
strategy and to align externally reported business segments with changes that
have occurred in the companys internal structure over the past several
months. The companys four new segments are as follows:
– Retail and Related Services — This segment consists of merchandise
sales and related services, including service contracts, delivery and
product installation and repair services. It covers all Sears selling
channels, including specialty and full-line stores as well as direct-to-
customer operations which includes online, catalogs and clubs and
services.
– Credit and Financial Products — This segment includes Sears domestic
credit business and the companys related financial product offerings.
– Sears Canada — Formerly named the International segment, this segment
continues to include the results of the companys majority-owned
Canadian subsidiary.
– Corporate and other — This segment is composed of home office expenses,
holding company items and certain home improvement services businesses,
including Sears Termite and Pest Control.
First quarter 2001 results, scheduled to be announced April 19, will
reflect the revised segment reporting structure. Financial data for 2000 and
1999 has been restated to reflect the new segment structure and is included
with this news release. The changes in segment reporting do not affect
consolidated operating income or net income.
Sears Adopts New Accounting Standard Resulting In One-Time Charge
In the second quarter of 2001, Sears will adopt FASB Statement No. 140,
“Accounting for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities,” which establishes new conditions for
securitization transactions to be accounted for as sales of receivables. Under