Hoffman Estates, IL—Sears Holdings today reported another dismal earnings report. This time, its second quarter profit widened to $573 million, its 9th straight quarterly loss.
Sears has been embarking on a program on reduce costs, close stores and improve pricing and promotions. Chairman/CEO Edward Lampert has been selling or spinning off assets (Lands’ End) to help raise cash. The company’s Shop Your Way loyalty program has been a bright spot, generating about 73% of eligible sales in the quarter.
Net loss expanded to $573 million, or $5.39 a share, from $194 million, or $1.83, a year earlier, as sales fell 9.7%, Sears Holdings said today in a statement. The shares declined as much as 9.3%.
Revenue declined to $8 billion from $8.87 billion, with online and multi-channel sales being a bright spot with an 18% increase. Comp sales at Kmart fell 1.7% but rose 0.1% at Sears for a companywide decrease of 0.8%.
In a conference call with analysts today Thursday, company executives blamed the sales slump on factors such as a lagging electronics business at Sears, poor grocery and household sales at Kmart and too many promotions.
“Our second quarter earnings are unacceptable, and we are taking steps to address our performance on several levels,” Lampert, said in a statement.
Sears has also shuttered about 300 stores since 2010, according to Reuters. The company announced earlier this year that it planned to close 130 more in 2014. Rob Schriesheim, Sears’ chief financial officer, said in Thursday’s release that the company may go beyond that 130 number.
In addition to the store closures, Lampert identified other transformation initiatives on the call. The company is focusing on boosting its digital business, shifting the mix of promotions so it’s more focused on the company’s “Shop Your Way” rewards program, leasing out unproductive space and working on the supply chain to make sure the stores have “the right mix of products,” he said.
“Second quarter was a little worse than we had expected,” Matt McGinley, managing director at International Strategy & Investment Group, said today. “But, overall, no major surprises—Sears results are consistently bad.”
Annual revenue has shrunk by almost a third since Sears Holdings last had sales growth. The retailer last posted a quarterly gain, when compared to year-earlier figures, during the three months ended February 2007, when annual sales were $53 billion. The retailer generated $36.2 billion in revenue last fiscal year.
Sears also said today the company plans to seek more long-term capital-structure flexibility from lenders in the coming six to 12 months.
In May, Sears Holdings said it is exploring options for its remaining stake in Sears Canada after years of losses. The company today said it has had talks with third parties about options for the Sears Auto Center business, including partnerships.
Sears “just doesn’t have the same resonance, it doesn’t have the same level of importance to people as it had 30 years ago,” McGinley said.