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Sears reports fourth quarter, 2004 financials

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Sears, Roebuck & Co.'s net income for the fourth quarter of 2004 was $378 million versus net income of $2.7 billion during the same period in 2003.

"Fourth quarter earnings and revenues met our expectations, with control of costs and expenses offsetting margin pressure," says Sears Chairman and CEO Alan Lacy.

Sears says its 2003 results reflected the divestitures of its National Tire & Battery and Credit and Financial Products divisions.

Lacy reports that the company's domestic store sales were flat during 4Q 2004, "with sales increases in October and November offset by a decline in December. The year was marked by further restructuring and repositioning of our core business, which slowed short-term results but positions us well for the future."

Sears' domestic segment -- which includes all of its retail formats -- achieved operating income of $471 million during the fourth quarter, a $422 million jump over Q4 2003 income.

For the full year, Sears achieved $350 million in net income, "before the cumulative effect of a change in accounting principle," say Sears officials. Sears' net income for the full year of 2003 totaled $3.4 billion.

Sears full year 2004 results "include a one-time, non-cash, after-tax charge of $839 million for the cumulative effect of a change in accounting principle related to its domestic pension and post-retirement medical benefit plans."

Other factors impacted Sears' fully year results, according to company officials, including:

* revenue from the sales of Sears Canada receivables;

* direct costs associated with the pending merger with Kmart;

* "curtailment gain" related to changes to the company's retiree medical benefits;

* interest and associated debt retirement costs related to the legacy debt of the former Credit and Financial Products business;

* "a charge for severance costs associated with the retstructuring of the company's home office organization."

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