Sears 2006 Annual Report Download - page 21

Fiscal Year
Effective March 23, 2005, the Company changed its fiscal year end from the last Wednesday in January to
the Saturday closest to January 31st. In fiscal 2006, the Saturday nearest January 31st was February 3, 2007.
Therefore, fiscal 2006 consisted of 53 weeks. Both fiscal 2005 and fiscal 2004 consisted of 52 weeks. Unless
otherwise stated, references to years in this report relate to fiscal years rather than to calendar years. The
following fiscal periods are presented in this report.
Fiscal year Reporting Entity Ended Weeks
2006 ............................. Sears Holdings Corporation February 3, 2007 53
2005 ............................. Sears Holdings Corporation January 28, 2006 52
2004 ............................. KmartHolding Corporation January 26, 2005 52
Sears Canada’s fiscal year end is the Saturday closest to December 31st. The results of operations for Sears
Canada are reported to Holdings on a one-month lag. Therefore, the consolidated statements of income and cash
flows for fiscal 2006 and fiscal 2005 include operating results for Sears Canada from January 1, 2006 through
December 30, 2006 and March 25, 2005 through December 31, 2005, respectively.
Fiscal 2006 Initiatives and Accomplishments
While Holdings was formed as a direct result of the 2005 merger between Kmart and Sears, the Company is
an entirely new organization, with both a vision and mission that extend well beyond merely combining these
two entities. Management of this new organization has developed vision and mission statements that describe the
company Holdings aspires to become. Holdings’ vision statement is:
Sears Holdings is committed to improving the lives of customers by providing quality services,
products and solutions that earn their trust and build lifetime relationships.
The Company’s mission is described by the following three simple, focused principles, against which every
associate in the Company is evaluated:
1. Build customer relationships
2. Make more money
3. Improve every day
In 2006 Holdings senior management expended significant effort to disseminate Holdings’ vision and
mission throughout the organization in order to align all associates, from front-line store managers and store
associates serving customers directly to those associates supporting stores in corporate and administrative
functions, on common goals and culture. The Company believes that the establishment of the proper culture, a
culture where the vision and mission are shared across the entire organization, is a necessary first step for
Holdings to achieve prominence in the retail industry and become a great company.
The retail industry is highly competitive and as such Holdings faces significant challenges to achieve
prominence. One significant challenge is the fact that the sales and profit productivity of many competitor stores
exceeds that of Holdings’ own stores. Therefore, the Company believes the greatest near-term value, and its
greatest immediate challenge, comes from better utilizing Holdings’ existing base of over 3,000 stores to deliver
greater value to customers and ultimately Holdings shareholders. The Company will strive to better leverage the
significant scale it already has, as well as the Company’s brand strength and service offerings to improve
Holdings’ multi-channel (store, on-line and catalog) shopability and continue to give customers reasons to shop
Holdings more frequently.
While the Company’s mission principles (build customer relationships, make more money and improve
every day) are simple in concept, they can be difficult to execute within the context of a highly competitive retail
21