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Department store retailer Sears Canada Inc. saw its net profits cut by more than half in the latest quarter on a drop in revenues at its stores.

The Toronto company said Wednesday it earned $38.7 million or 36 cents per share for the 13 weeks ended Jan. 28, which includes the key Christmas retail period.

That compared with net profits of $82.7 million or 77 cents per share a year earlier.

Total revenues for the quarter dropped 6.4 per cent to $1.37 billion from $1.46 billion.

For the full fiscal 2012 year, Sears Canada lost $60.1 million, reversing a net profit of $115.2 million the previous year. Annual sales dropped to $4.6 billion from more than $4.9 billion.

"While we are disappointed with our performance for 2011, including the fourth quarter, we believe we have begun to stabilize the business and create a foundation for returning the business to historical performance levels," president and CEO Calvin McDonald said in a release before stock markets opened Wednesday.

Sears has cut jobs

"Because of our actions to reduce unproductive inventory, we had higher cash flow in 2011 than the prior year, and enter 2012 with a much cleaner inventory position."

Sears Canada has been cutting jobs, decluttering stores and making other moves to attract more customers in a highly competitive Canadian retail market.

Last week, the company announced it is cutting prices on more than 5,000 items as the big department store chain tries to boost sales.

It is also dealing with stepped-up competition from the likes of Wal-Mart, while U.S. discounter Target is about to set up shop in Canada.

Last month, Sears Canada laid off 400 employees at stores across Canada as it closed nearly all of its in-store cafes. In addition to the cafe jobs, the company also cut some support and head office staff.

The cuts followed the loss of about 70 head office jobs at Sears Canada late last year.

Sears has roughly 30,000 employees across Canada and more than 400 corporate, dealer and home services stores.