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Sears

The analysis of Sears is complicated by the fact that a significant portion of the company's overall revenues and earnings are based on credit activity rather than on retail. This makes it impossible to compare the Sears operating results to any other retail establishment. At the same time, we cannot simply ignore the credit revenue. It is part of the core business of Sears. Even though the company is primarily a retail operation, its marketing strategy is based so heavily on credit that we cannot separate the two segments entirely.

Even so, it is necessary to analyze Sears by making a two-part adjustment. First, we must be able to view the Sears results by separating retail and credit segments. Second, we have to take core earnings adjustments out of the picture to arrive at a realistic likely growth trend.


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