TORONTO – Sears Canada Inc. (TSX:SCC) reports it had a $373.7 million net profit in for the quarter ended Feb. 1.
That was up from $39.9 million a year earlier, but the increase was largely related to gains from unusual items as the company downsizes.
Total revenue for the quarter was just under $1.17 billion, down nearly $129 million or 10 per cent from a year earlier.
Sales from comparable stores totalled $833.8 million, down $100 million or 10 per cent from last year’s fourth quarter.
The Toronto-based national retailer says this year’s fourth quarter included $391.5 million pre-tax gains related to early lease terminations for some large stores marked for closure.
Sears Canada also had gains from the sale of certain real estate holdings and amendments to post-retirement benefits but they were partially offset by $51.2 million in downsizing costs, mainly severance.
On an adjusted basis, pre-tax earnings fell to $18 million for the 13 weeks ended Feb. 1, compared with $67.5 million a year earlier.
As with other retailers, Sears Canada was affected by severe winter weather — particularly ice storms in Ontario that caused widespread power failures and made travelling difficult before Christmas.
Same-store sales were down 6.4 per cent overall, with non-clothing items such as major appliances plunging.
Doug Campbell, the company’s president and CEO, said weather closed stores in December and January for 220 hours, compared with fewer than 40 hours a year earlier.
“We felt the effects of this most notably in the few days leading up to Christmas,” Campbell said.
“Despite this, we continued to have a positive quarterly same-store sales increase in our Apparel and Accessories business, but it was not enough to offset the impact felt in our Home and Hardlines businesses.”
Campbell said that Sears Canada has taken the steps to “right-size” its organization relative to the size of the business and will focus on serving Canadians more effectively.