After having once been as dominant as Wal Mart, in recent years Sears has struggled to survive. It has enacted many changes trying to turn itself around. In the 1990s, it shocked and disappointed many loyal customers by closing its catalog business. It also closed 113 stores and eliminated 50,000 jobs. None of these changes was enough to make Sears truly competitive, so in March 2005 Sears merged with Kmart to form the third largest U.S. retailer. Here is recent data for Sears Holdings, Inc.
|
Year ended |
||
|
($ in millions) |
1/3/2007 |
12/28/2006 |
|
Net income |
$1,490 |
$858 |
|
Sales |
53,012 |
48,911 |
|
Cost of goods sold |
37,820 |
35,505 |
Instructions
Using the basic facts in the table, evaluate the following components of Sears’s profitability for the years ended January 3, 2007 and December 28, 2006.
Profit margin ratio
Gross profit rate
How do Sears’s profit margin ratio and gross profit rate compare to those of Wal Mart and Target for 2007?