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Sears' Bottom Line Barely Budges

Meanwhile, Ed Lampert takes control of marketing and merchandising.
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Quarterly earnings rose 4.5% from a year ago at

Sears Holdings


, the sprawling retail conglomerate fashioned last year by hedge fund manager Ed Lampert. Lampert also shuffled the company's leadership ranks and gave himself a greater role in several key operational areas.

The company, whose revenue rose 175% over the same periods due to the November merger of Kmart and Sears, cited a restructuring charge and new accounting standards for its single-digit profit growth. It said same-store sales fell by 0.3% at Kmart during the quarter due to lower traffic.

On the bottom line, Sears Holdings earned $161 million, or 98 cents a share, in the quarter ended July 30, compared with earnings of $154 million, or $1.54 a share, a year ago. Total sales were $13.19 billion in the latest quarter compared with $4.80 billion a year ago.

At domestic Sears stores, the company said, same-store sales fell 7.4% from a year ago, reflecting less discounting and lower inventories, two initiatives that are supposed to goose gross margin.

In addition to its earnings, Sears outlined a new role for Lampert and said it replaced CEO Alan Lacy, who led the old Sears, with Aylwin Lewis, the former

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executive Lampert poached to run Kmart in 2004.

In a move that might raise some eyebrows on Wall Street, money-manager Lampert will "direct the marketing, merchandising, design and on-line businesses of Sears Holdings, as well as Lands' End, to ensure that these initiatives are clearly focused on responding to customer needs."

Lampert, the company's largest shareholder, has heretofore been known primarily as an allocator of capital, a role that is formally under his control at Sears.

Lewis, who was formerly Sears Holdings' president and the CEO of Kmart Holding, will now be CEO and president of the parent, "with responsibility for the company's 3,900 stores, as well as home services, finance, legal, supply chain, information technology and human resources," the company said.

Lacy will remain vice chairman, chairman of Sears Canada, and will continue to focus on "merger integration and strategic issues."

In premarket trading, Sears Holdings stock was down $6.85, or 5.1%, to $128 on Instinet.