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Sears Canada Reports Operating EBITDA Increase of 10.9% for the Fourth Quarter and 8.6% for the Full-Year Comparable Periods

TORONTO, Feb. 27 Sears Canada Inc. (TSX: SCC) today announced its
unaudited fourth quarter and full-year results. Due to the previously
announced change in the Company's fiscal year end from the Saturday closest to
the end of December to the Saturday closest to the end of January, the opening
portion of this fourth quarter news release includes the 18-week period and
57-week period ending February 2, 2008 compared to the 13-week period and
52-week period ending December 30, 2006. To aid in understanding the results
for fiscal 2007, additional information is provided for the 13-week period and
52-week period ending December 29, 2007 (the "comparable period").

Total revenues for the 18-week period ended February 2, 2008 were
$2.296 billion compared to $1.874 billion for the 13 weeks ended December 30,
2006. Operating EBITDA for the period was $259.2 million, an increase of
$59.9 million or 30.1% over the 13-week period last year. Net earnings for the
period, which include unusual items, totalled $138.4 million or $1.29 per
share, compared to $108.5 million or $1.01 per share last year.
Total revenues for the 13-week comparable period ended December 29, 2007
decreased 3.4%. Same store sales decreased by 2.4% compared to the same period
last year. For this comparable period, as a percentage to total revenues,
gross margins increased by 159 basis points and expenses were flat to last
year. The resulting operating EBITDA exceeded 2006 by more than $21 million,
an increase of 10.9%. Net earnings for this comparable period increased 8.5%
compared to the same period last year.
Commenting on the fourth quarter, Dene Rogers, President and Chief
Executive Officer, Sears Canada Inc., said, "Our results are strong and we
were able to offset the impact of cross-border shopping in the U.S. in the
first half of the quarter; our associates met the challenges before them and
provided our customers with exceptional value throughout the holiday shopping
season."
Same store sales in the second half of the year ended December 29, 2007
decreased 2.9% as compared to the same period last year whereas same store
sales in the first half of the year increased 1.9% compared to the same period
last year. The sales in the second half were impacted by the strong Canadian
dollar which caused a significant increase in cross-border shopping in the
U.S.
Total revenues for the full 57-week year ended February 2, 2008 were
$6.326 billion compared to $5.933 billion for the 52-week period ended
December 30, 2006. Operating EBITDA for the full 57-week year was
$542.6 million, an increase of $78.1 million or 16.8% over the 52-week period
last year. Net earnings for the full year,were $308.5 million or $2.87 per
share, compared to $152.6 million or $1.42 per share last year.
Total revenues for the 52-week comparable period ended December 29, 2007
decreased 1.5%. Same store sales decreased 0.8% compared to the same period
last year. Margins increased 65 basis points and expenses reduced by 17 basis
points, resulting in an operating EBITDA increase of $39.9 million or 8.6%.
Net earnings for this comparable period increased 88.6% compared to the same
period last year.
"We had a strong performance in 2007, being able to significantly
increase our profitability over 2006," commented Mr. Rogers on the 2007
results. "I thank our 37,000 associates who have given their best to improve
our financial results this year, and who continue to improve our customers'
lives by providing quality services, products and solutions that earn their
trust and build lifetime relationships."

Sears Canada is a multi-channel retailer with a network of 197 corporate
stores, 183 dealer stores, 51 home improvement showrooms, over 1,800 catalogue
merchandise pick-up locations, 106 Sears Travel offices and a nationwide home
maintenance, repair, and installation network. The Company also publishes
Canada's most extensive general merchandise catalogue and offers shopping
online at Sears Canada.