Sears Posts Loss as Revenue Slides
August 25 2016 - 8:00AM
Dow Jones News
Sears Holdings Corp. on Thursday reported improved core results
for its fiscal second quarter, helped in part by lower costs, but
the retailer still posted a loss amid sliding sales.
Sears follows other retailers, from Kohl's Corp. to Target
Corp., that have reported declining sales as shoppers have
continued to shift spending online and away from brick-and-mortar
stores. Meanwhile, Sears has been stumbling recently through
efforts to transform itself in a bid to return to profitability,
focusing on assortment, sourcing, pricing and inventory management
practices—sometimes at the expense of sales.
During the quarter, Kmart same-store sales declined 3.3%, and
Sears domestic same-store sales fell 7%. Chief Executive Edward S.
Lampert said the company's performance remains pressured by a
"challenging competitive environment."
Sears earlier this year added Bruce Berkowitz of Fairholme
Capital Management to its board. Mr. Berkowitz has noted that Sears
has assets it could sell, including the Kenmore, Craftsman and
DieHard brand names and its home services unit. Sears on Thursday
said it would continue to explore options for the brands over the
next few months, and said it has received interest from potential
partners.
In all for the July quarter, Sears reported a loss of $395
million, or $3.70 a share, compared with a year-earlier's profit of
$208 million, or $1.84 a share, a year earlier. Excluding certain
items, Sears's adjusted loss narrowed to $2.03 a share from $2.40 a
share in the year-ago period.
Revenue dropped 8.8% to $5.66 billion, largely due to the drop
in same-store sales and a decline in the number of stores in
operation.
Gross margin fell to 22.2% in the quarter from 23.1% a year
earlier, while costs and expenses fell 3%.
Shares of Sears, inactive premarket, have risen 17% in the past
three months but are still down 37% from a year ago.
Write to Joshua Jamerson at joshua.jamerson@wsj.com
(END) Dow Jones Newswires
August 25, 2016 07:45 ET (11:45 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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