3333 Re Fresh Sears Annual Report

Summary

Sears, Roebuck and Co. 3333 Beverly Road Hoffman Estates, Illinois 60179 www.sears.com
re: Fresh
Sears Annual Report 2002
Sears Annual Report 2002
Company Information
Headquarters Customer Relations Please use the following address
Sears, Roebuck and Co. 1.800.549.4505 for items sent by courier:
3333 Beverly Road EquiServe Trust Company, N.A

Financial/Shareholder
Hoffman Estates, Ill . 60179 150 Royall Street
Information
847.286.2500 Canton, MA 02021
You may call Sears toll-free at
Annual Meeting 1.800.SEARS80 For items delivered in person:
The Annual Meeting of (1.800.732.7780) STARS , Inc

Shareholders of Sears, or visit sears.com 100 William Street, Galleria
Roebuck and Co. will be or write our registrar: New York, NY 10038
held at the company’s Sears, Roebuck and Co

The following trademarks and
headquarters at c/o EquiServe Trust
service marks appearing in the 2002
3333 Beverly Road, Company, N.A. annual report are the property of
Hoffman Estates, Ill . P.O. Box 43069 Sears, Roebuck and Co.:
on May 8, 2003 Providence, RI 02940-3069
A&E Factory Service TM,
at 10:00 a.m. for any of the following:
Apostrophe ®, Canyon River Blues ®,
Sears Online Covington TM, Craftsman ®, DieHard ®,
˜ Most recent stock price
This annual report and information Kenmore ®, Lands’ End ®, NTB ®,
OSH Orchard Supply Hardware ®,
other financial information
˜ Copies of the company’s Satisfaction Guaranteed or Your
can be found online at:
financial reports Money Back SM, Sears ®, Sears
www.sears.com
American Dream Campaign SM,
Investor Information ˜ Transfer agent/shareholder Sears: Where Else? SM, TKS Basics ®,
records
Financial analysts and The Great Indoors ®, Wish Book ®
investment professionals ˜ Individual stock records © 2003 Sears, Roebuck and Co

should direct inquiries to:
Printed on recycled paper
Investor Relations ˜ Investment plan accounts
847.286.7385. ˜ Dividend checks
Sears Direct Purchase ˜ Stock certificates
Stock Plan Information
EquiServe web site:
Prospective shareholders,
www.equiserve.com
and shareholders whose
E-mail address:
shares are held by a broker
[email protected]
or bank, should call
TDD for hearing impaired:
1.888.SEARS88
1.800.952.9245
(1.888.732.7788)
or visit sears.com

Sears is financially strong

We have a century-long reputation for trust
and quality. We serve 48 million American households
every year. We are committed to improving our
merchandise, enhancing our customer relationships,
making the shopping experience easier and
growing our profits. We’re on the way to
building a fresh new Sears

re: Vitalize
Sears is a healthy company with strong cash flow
and a solid balance sheet . Profits grew in 2002, as we
better managed margin , expenses and inventory

˜ Record comparable earnings ˜ Lands’ End acquisition revitalizing
per share, up 17 percent* our apparel offering and adding
growth opportunities
˜ Record comparable net income,
$1.6 billion* ˜ Launched Covington–new, classic,
casual-apparel brand
˜ 25% return on equity*
achieved in 2002 ˜ Inventory, promotion and sourcing
initiatives improved gross margin
$5 25% 29%
4 20 28
3 15 27
2 10 26
1 5 25
99 00 01 02 99 00 01 02 99 00 01 02
Earnings Per Share* Return On Equity* Gross Margin Rate
* Excludes noncomparable items. See page 16 of the attached
Form 10-K for a description of noncomparable items

March 12, 2003 Sears Annual Report 2002
to: Sears Shareholder
fr: Alan Lacy
re: Fresh
A year ago, I wrote that 2002 would be a very important to our competition. We are working diligently to restore
transition year for Sears. Our focus was to fundamen- our share price to an appropriate value

tally reposition and restructure our core business, the
Record earnings
Full-line stores. Thousands of Sears associates and
On a reported basis, net income was up 87 percent
managers committed to executing the key initiatives
from last year. Sears reported record comparable
that supported this strategy. Their efforts were
earnings per share in 2002 of $4.92, an increase of 17
successful, and we left 2002 a much different and
percent over comparable EPS for the previous year

stronger business

Comparable net income was also a record at $1.6
We also wanted to build on the great heritage, great billion, and the company generated nearly $1 billion
brands and strong resources that are so much a part in free cash flow from operations.* Total revenues were
of Sears. We succeeded here as well. We introduced $41.4 billion

innovative new products from Kenmore and Craftsman

These results included strong profit growth in our core
We improved customer satisfaction levels in Product
Repair Services. We launched our new, casual-apparel retail and related services segment, which improved
brand for men, women and kids, called Covington. 28 percent on a comparable basis. Comparable store
And, in an opportunity that comes along once in a sales were lower, reflecting the difficult economy, store
lifetime, we acquired highly regarded Lands’ End, disruption during much of the year and the exiting of
America’s largest direct apparel merchant. unprofitable promotional activities and lines of business

We also earned a record profit in an uncooperative Our credit and financial products segment remains
economy, thanks to operational discipline and our highly profitable and earned more than $1.5 billion for
restructuring activities. It was a year of substantial the third consecutive year on a comparable basis. Credit
change for the Sears you know, a home-and-family- had a disappointing second half, however, because the
focused broadline retailer with outstanding credit and economy negatively impacted consumer credit quality
service capabilities. and because of unanticipated problems that developed
in our Sears Gold MasterCard portfolio. We have taken
Yet, with our many successes in 2002 and real progress
aggressive actions to address those problems

against our goals, I was disappointed that our share
price fell sharply in the fourth quarter. The decline Sears Canada enjoyed a turnaround year as it com-
coincided with disappointment in our credit business, pleted the conversion of the remaining Eatons stores
sagging consumer confidence and soft sales relative to the Sears format

*See page 16 of the attached Form 10-K for a
description of noncomparable items

re: Store
With the execution of multiple Full-line
store initiatives, 2002 was a year of significant change

Nearly every aspect of our stores , from
merchandising to check-out, underwent change to create
an easier-to-shop , easier-to-operate store

˜ More focused, relevant ˜ More clearly defined roles and
merchandise assortments responsibilities for store associates
˜ More convenient and appealing ˜ More efficient supply chain processes
shopping environment
˜ Significantly improved cost structure
˜ A streamlined field organization
$1200
28%
increase 1000
800
600
400
200
2001 2002
Operating income (in millions)
from retail and related services on
a comparable basis
See page 17 of the attached Form 10-K for additional segment results

Sears Annual Report 2002
The sale of our shares in Advance Auto Parts netted a stature comparable to Kenmore, Craftsman and
noncomparable gain of $0.74 per share, or $445 million DieHard, it’s also a highly profitable, well-run business
in after-tax proceeds. During the year, we repurchased with an engaging, customer-driven culture. Because
more than $400 million of our shares. We consider our of Lands’ End, Sears is now the No. 1 online apparel
shares undervalued and will continue to repurchase merchant in the United States. Also, sears.com had
shares with our excess cash flow. More than $4 billion another strong year, significantly increasing its sales and
has been returned to shareholders over the past four increasing store sales through product research and
years through dividends and share buybacks. online purchasing with in-store merchandise pick-up

Our multi-channel sales strategy, coupled with national
Overall, we are pleased with our 2002 operational
delivery and service capabilities, provides us with
progress, despite our many challenges. Sears ended
significant growth opportunities

the year a very profitable company with a solid
balance sheet. During 2002, I continued to refine the company’s
organizational structure and to strengthen our senior
However, our work continues in 2003. There is much
team with executives who are well qualified– strategically
left to do

and operationally

Repositioning and restructuring
2003 priorities
Our focus in 2002 was to reposition and restructure the
When we build a new store, we first pour the foundation

Full-line stores. We knew there would be executional
The work is unglamorous and takes time. But only
risk, particularly transitional revenue loss. But, in
when the groundwork is laid can we take the next
less than 12 months, we significantly improved our
steps. In 2002, we poured the foundation of a new
operations. We reorganized our field and support
Sears. In 2003 , we are taking the next steps with
groups and, in the process, altered the activities and
focused and systematic efforts in five key areas:
accountabilities of virtually every store associate

We refined the way our goods reach the store, the look ˜ Increasing sales. Our disruptions are getting behind us

We are becoming more customer driven and improving
of the interior and the way merchandise is presented

what and how we sell. Expect new marketing activities
We also changed much of the merchandise itself,
to better differentiate Sears and to drive sales

adding Covington and Lands’ End and eliminating
under-performing businesses and brands in order ˜ Continuing to fix Full-line stores. We must continue
to provide space for merchandise categories we can to strengthen the foundation and improve upon our
grow profitably. These efforts also enhanced our new ways of doing business

customer shopping experience. And, not only have
these initiatives improved customer satisfaction, they ˜ Growing our customer direct capabilities. The Lands’
End online and catalog business is a growth business
also have significantly lowered our cost structure

and, with sears.com, we have great potential as a
Lands’ End has been an energizing addition to our multi-channel retailer

company. Not only is Lands’ End a great brand with a
re: Solve
Whether it ’s responding to the diverse needs
of multicultural customers , supporting inclusiveness
in the workplace or helping people establish themselves
in the communities we serve , Sears is growing
with America’s diverse cultures

˜ The $100 million Sears American ˜ Sears managers are trained on the
Dream Campaign will help millions importance of diversity in today’s
of Americans overcome barriers to business environment

purchasing homes

˜ Sears leadership is committed to
˜ Sears multicultural store base has diversity as a strategic priority

grown more than 45 percent in the
last six years

U.S.: 13%
Sears: 18.2%
U.S.: 4.2%
Sears: 6.4%
Asian
Hispanic U.S.: 12.7%
Sears: 14.9%
African-American
Demographic Landscape
The Sears trade area, a five-mile radius of all Sears stores,
averages a higher percent of ethnic representation than the U. S . population

Sears Annual Report 2002
Diversity and community relations
˜ Growing what is working in credit and fixing what
is not. We will improve the performance of Sears Gold I firmly believe that for Sears to be successful, every
MasterCard and focus on continuing to make the Sears level of our organization must represent the diversity
proprietary card a customer-relevant product. of America and our customer base. Although the diver-
sity of our organization overall compares very well
˜ Improving productivity. Our goal is to increase earn- with the country, our leadership is not as diverse as it
ings per share by 50 percent over the three years ending
needs to be. Hiring, developing and promoting minorities
in 2004. To do so in a tough economy demands greater and women to leadership positions is a key priority
revenue growth coupled with further improvement in for each member of our senior management team

our cost structure

I am very proud of the efforts Sears is making to focus
Of course, every year has its challenges. In 2003, we are its community outreach programs and to help millions
taking the next major steps in building a new Sears. of Americans overcome barriers to purchasing homes

These efforts are customer driven. We continue to In 2002, we launched the Sears American Dream
better understand the customer’s perspectives and Campaign, a multi-year, $100 million commitment to
needs, and place them at the core of our activities. The provide products and services to help disadvantaged
customer is the reason we are in business. families acquire, outfit and maintain their homes. The
program will hit full stride in 2003

Board retirement
Warren L. Batts, retired chairman and CEO of Associates are key
Tupperware Corp. and retired chairman of Premark Sears’ success is the direct result of the quality of our
International, retired from Sears’ board of directors people and the work they do each day to improve how
at the 2002 annual meeting. Warren provided out- we satisfy our customers. I want to thank our associates
standing leadership during his 16 years with the board for their hard work and dedication to creating the
and chaired many committees. We thank him for his foundation for a new Sears and their eagerness to push
many contributions. ahead and continue to improve

I am very confident in the future of this great company

Alan J. Lacy
Chairman and Chief Executive Officer
March 12, 2003
Executive Officers Board of Directors
Alan J. Lacy Mark C. Good Hall Adams, Jr. Michael A. Miles
Chairman of the Board, Executive Vice President Retired Chairman Retired Chairman
President and and General Manager of the Board and of the Board and Chief
Chief Executive Officer Product Repair Services Chief Executive Officer Executive Officer
Leo Burnett Company, Inc. Philip Morris
Janine M. Bousquette Lyle G. Heidemann
Companies, Inc

Executive Vice President Executive Vice President Brenda C. Barnes
and Chief Customer and and General Manager Former President and Hugh B. Price
Marketing Officer Hardlines Chief Executive Officer President and
Pepsi-Cola North America Chief Executive Officer
Kathryn Bufano Gerald F. Kelly
National Urban League
Executive Vice President Senior Vice President and James R. Cantalupo
and General Manager Chief Information Officer Chairman of the Board and Dorothy A. Terrell
Softlines Chief Executive Officer Venture Partner
Sara A. LaPorta
McDonald’s Corporation First Light Capital
Mary E. Conway Senior Vice President
Executive Vice President Strategy Donald J. Carty Raul H. Yzaguirre
and General Manager Chairman of the Board and President and
Greg A. Lee
Full-line Store Operations Chief Executive Officer Chief Executive Officer
Senior Vice President
AMR Corporation and National Council
Steven M. Cook Human Resources
American Airlines, Inc. of LaRaza
Vice President
Paul J. Liska
Deputy General Counsel W. James Farrell
Executive Vice President
and Acting General Chairman of the Board and
and President
Counsel Chief Executive Officer
Credit and Financial
Illinois Tool Works, Inc

Mark S. Cosby Products
Executive Vice President Alan J. Lacy
William G. Pagonis
President Chairman of the Board,
Senior Vice President
Full-line Stores President and
Supply Chain Management
Chief Executive Officer
David F. Dyer
Glenn R. Richter Sears, Roebuck and Co

President and
Senior Vice President and
Chief Executive Officer
Chief Financial Officer
Lands’ End and
Executive Vice President
and General Manager
Sears Canada:
Customer Direct
Mark A. Cohen
Chairman of the Board and
Chief Executive Officer
Sears At A Glance
Service People Products
˜ Approximately 870 Full-line ˜ Approximately 241,000 ˜ No. 1 retailer of home
stores and more than 1,300 associates in the U.S. and appliances, lawn mowers
specialty stores. 48,000 in Canada. and fitness equipment

˜ More than 48 million active ˜ Nearly one million hours of ˜ Craftsman is ranked No. 1
Sears customer households. community volunteer service brand in America by men for
provided by associates and overall quality

˜ One of America’s largest
retirees each year

credit card businesses. ˜ Kenmore is the No. 1
˜ Nearly $50 million in selling appliance brand in
˜ Largest product repair service
monetary and merchandise the U.S., where one in every
provider, with 14.5 million
contributions by Sears and its two homeowners owns a
service calls made annually

associates to not-for-profit Kenmore appliance

˜ More than 450 million organizations in 2002

˜ Lands’ End is the largest
customer checkouts in 2002

˜ Listed as one of the top 30 specialty apparel catalog
˜ More than 5 million product companies for executive company in the U.S. and the
deliveries to homes annually. women in 2002 by the No. 1 seller of apparel online

National Association of
˜ A promise of “Satisfaction ˜ DieHard is America’s
Female Executives

Guaranteed or Your most preferred
Money Back” for more ˜ Listed in Latina Style automotive battery

than a century. magazine’s top 50 companies
for Latinas in 2002

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
For Annual and Transition Reports pursuant to Sections 13 or 15(d) of the Securities Exchange Act of 1934
X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 28, 2002
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission file number 1-416
SEARS, ROEBUCK AND CO

(Exact Name of Registrant as Specified in Its Charter)
New York 36-1750680
(State of Incorporation) (I.R.S. Employer Identification No.)
3333 Beverly Road, Hoffman Estates, Illinois 60179
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (847) 286-2500
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of Each Exchange on Which Registered
New York Stock Exchange
Common Shares, par value $0.75 per share Chicago Stock Exchange
Pacific Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
On January 31, 2003, the Registrant had 316,815,592 common shares outstanding. The aggregate market value (based on the closing
price of the Registrant's common share as reported in a summary of composite transactions in The Wall Street Journal for stocks
listed on the New York Stock Exchange on June 28, 2002) of the Registrant's common shares owned by non-affiliates (which are
assumed to be shareholders other than (i) directors and executive officers of the Registrant and (ii) any person known by the
Registrant to beneficially own five percent or more of Registrant's common shares), as of June 28, 2002 was approximately $13.2
billion

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months and (2) has been subject to such filing requirements for the past 90 days

Yes X No
Indicate by check mark whether the Registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2)

Yes X No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not
be contained, to the best of the Registrant's knowledge, in definitive proxy or information statements incorporated by reference in
Part III of this Form 10-K or any amendment to this Form 10-K. [ ]
Documents Incorporated By Reference
Part III of this Form 10-K incorporates by reference certain information from the Registrant's proxy statement relating to its Annual
Meeting of Shareholders to be held on May 8, 2003 (the "2003 Proxy Statement")

Or vi sit sears.com. Customer Relations 1.800.549.4505 Financial/Shareholder Information You may call Sears toll-free at 1.800.SEARS80 (1.800.732.7780) or visit sears.com or wr ite our …

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Frequently Asked Questions

What happened to sears holdings?

HOFFMAN ESTATES, Ill. - Sears Holdings Corporation (“Holdings,” “we,” “us,” “our,” or the “Company”) (NASDAQ: SHLD) today announced financial results for its fourth quarter and full year ended February 3, 2018.

Is sears owned by transformco?

Sears is now owended by Transformco Holdings Corporation’s subsidiary, Sears, is a chain of department and retail stores. Sears Holdings Corporation also owns Kmart. Sears operates over 1,900 stores in the U.S. 3333 Beverly Road

Does sears own kmart?

Sears Holdings Corporation’s subsidiary, Sears, is a chain of department and retail stores. Sears Holdings Corporation also owns Kmart.  Sears operates over 1,900 stores in the U.S. NOTE: Sears is currently in bankruptcy. You may therefore not get a response from our executive contacts.

How do i contact sears?

Phone Contacts. Main: (847) 286-2500 (Note from our Sears contact: please use 800-number for customer service inquiries) Fax: (847)-286-3911 or (847) 286-4511 or (847) 286-5500.