Troubled Times: Sears Q1 Loss Widens as Sales Slide

In Reports, What's New, Industry News by Jeff Prine

SearsHoffman Estates, IL–In what is its 29th consecutive quarter of earnings losses, Sears Holding Corp. today reported its first quarter loss widened as sales continued to slide.

For the quarter ended May 3, the owner of Sears and Kmart posted a net loss of $402 million or $3.79 a share, compared to prior year’s loss of $279 million or $2.63 a share last year. Excluding certain items, adjusted profit was $2.24 a share, s

To Close 80 Stores

Net revenue was $7.88 billion compared with $8.45 billion in the year-ago quarter. That also was less than the $7.71 billion in sales analysts had forecast.

The company attributed a sales decline to the fact it has fewer stores in operation than a year, a drop in sales at Sears Canada (comps down 7.6%), and that its Lands’ End business was spun off into a separate entity.

“Our performance in the first quarter highlights the challenges we are facing as well as the progress we are making in this transformation,” said Edward Lampert, chairman/ceo.

For the quarter, domestic comparable store sales declined 1% with lower sales at Kmart, partly offset by a slight growth in Sears domestic.

Sears domestic’ actually posted a 0.2% increase in comparable store sales compared to a 2.4%decline last year. Excluding the impact of consumer electronics, comparable store sales growth would have been 0.8%, the company noted.

Kmart’s comp store sales fell 2.2% as compared to a 4.6% drop last year, due to declines in the consumer electronics and grocery and household categories, the company said.

Online and multichannel said grew 26%. Another bright spot: the company’s rewards program, Shop Your Way which for 74% of eligible sales at Sears and Kmart stores during the first quarter.

Sears Holdings said it is in the process of closing about 80 Sears and Kmart stores this year and may close more before the end of the years. The closings come on top of the 100 doors it closed in 2012.

The company added that it is continuing to evaluate options to separate Sears Auto Center business, and has had discussions with third parties regarding a variety of opportunities, including partnership.

Earlier this month, Sears Holdings said it had strategic plans to sell its 51% stake in Sears Canada, a move that would result in the sales of Sears Canada as a whole.

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