HOFFMAN ESTATES, Ill. – Sears Holdings Corp. said Thursday its fourth-quarter profit dropped 55 percent due to store closing, impairment and severance charges, but adjusted results beat analysts' estimates.
For the period ended Jan. 31, the retailer earned $190 million, or $1.55 per share. That compares with a profit of $426 million, or $3.17 per share, a year ago.
Quarterly results included an impairment charge of $187 million, or $1.53 per share, at Orchard Supply Hardware as well as severance and store closing charges. The charges were partially offset by a 7 cents-per-share tax benefit; a 4 cents-per-share gain on the repurchase of some debt and 3 cents-per-share mark-to-market gains on Sears Canada hedge transactions.
Adjusted earnings were $360 million, or $2.94 per share.
Sales fell 12 percent to $13.28 billion during the quarter from $15.07 billion, while same-store sales declined 8.3 percent.
Sears domestic same-store sales dropped 11 percent and Kmart same-store sales slipped 5 percent.
Same-store sales, or sales at stores open at least a year, are a key indicator of retailer performance since they measure growth at existing stores rather than newly opened ones.
The retailer blamed its same-store sales dropoff on the prolonged housing downturn, which weighed on home appliance sales at its domestic Sears locations, as well as a pullback in consumer spending, which hurt home, household goods and apparel sales at Sears and Kmart stores as well as lawn and garden sales at Sears stores.
Like many retailers, Sears has come under pressure as shoppers continue to reign in their discretionary spending due to economic and job concerns.
"Fiscal 2008 was a very difficult year for the U.S. economy, and its effect on consumer confidence reflects the turmoil that has enveloped the retail industry and our business. We maintained our focus on providing great product and service value to our customers, many of whom feel the impact of lower incomes and tighter credit," Interim Chief Executive and President W. Bruce Johnson said in a statement.
Full-year net income plunged 94 percent to $53 million, or 42 cents per share, from $826 million, or $5.70 per share, in the previous year.
Adjusted earnings were $215 million, or $1.69 per share.
Yearly revenue slipped to $46.77 billion, down 8 percent from $50.7 billion.
Same-store sales for fiscal 2008 dropped 8 percent, while Sears domestic same-store sales fell 9.5 percent and Kmart same-store sales declined 6.1 percent.
Sears has about 3,900 full-line and specialty retail stores in the U.S. and Canada.