Same Store Sales Growth continues into
early 2017
TORONTO, April 26, 2017 /CNW/ - Sears Canada Inc.
(TSX: SCC; NASDAQ: SRSC) today announced operational highlights and
financial results for the fourth quarter of Fiscal
20161. The results are highlighted by growth in
same store sales and units sold since mid-November and through the
first two months of Fiscal 2017. Brandon G.
Stranzl, Executive Chairman of Sears Canada, said, "Our work
to reinvent our business with product innovation, customer
experience, and brand positioning is starting to resonate with
consumers. After many, many years of decline, Sears Canada is
starting to realize growth in same store sales. We still have
a lot of hard work to do and challenges ahead of us, but we are
resolutely focused on the steps required to drive sustainable
growth and profitability over time." We have recently seen
promising signs of growth in same store sales since the anniversary
of the termination of the credit card business as of November 15, 2016. (Shown in the table
below.2)
Fiscal 2016 to
March 2017 Same Store Sales and Same Store Units
|
|
|
|
|
|
|
|
|
|
|
|
|
YTD Nov 15th
2016(*)
|
Nov 16th-30th
2016
|
Dec
2016
|
Jan
2017
|
Feb
2017
|
Mar
2017
|
Same Store
Sales
|
|
|
|
|
|
|
|
|
Core
|
(7.9%)
|
8.6%
|
1.2%
|
7.1%
|
7.1%
|
2.8%
|
|
Other
|
(3.4%)
|
8.7%
|
9.3%
|
0.2%
|
2.1%
|
11.4%
|
|
Total
|
(7.1%)
|
8.6%
|
2.2%
|
5.9%
|
6.2%
|
4.1%
|
|
|
|
|
|
|
|
|
Same Store
Units
|
|
|
|
|
|
|
|
|
Core
|
(3.1%)
|
13.7%
|
6.1%
|
35.8%
|
37.6%
|
33.0%
|
|
Other
|
(22.1%)
|
(42.8%)
|
(32.9%)
|
(35.9%)
|
(35.7%)
|
4.7%
|
|
Total
|
(4.6%)
|
8.9%
|
3.0%
|
28.5%
|
30.3%
|
30.8%
|
|
(*) The credit card
marketing and servicing agreement between the Company and
JPMorgan
|
|
Chase Bank, N.A. (Toronto
Branch) ("JPMC") terminated on November 15, 2015
|
|
|
______________________________
1 Fourth quarter 2016 and 2015
represent the 13-week periods ended January 28, 2017 and January
30, 2016, respectively. Fiscal 2016 and 2015 represent the 52-
week periods ended January 28, 2017 and January 30, 2016,
respectively.
|
2 The
Company does not intend to disclose monthly same store sales on a
recurring basis. This is a one-time disclosure to help readers
understand the impact of (i) the credit card termination and (ii)
the new business strategy.
|
Fourth Quarter 2016 Key Operational Highlights
- Same Store Sales. Same store sales increased by 1.3% in the
fourth quarter compared to the same quarter last year and core
retail same store sales increased by 0.9%. The Company has been
focused on a more customer-centric, out-the-door selling price
model, including everyday price adjustments for major appliances
and mattresses based on competitors' online pricing, which has
resulted in an increase of unit sales across all store channels for
the fourth quarter this year compared to the fourth quarter last
year.
- Adjusted EBITDA. Adjusted EBITDA for the fourth quarter was a
loss of $63.7 million compared to a
loss of $51.2 million in the same
quarter last year.
- Sears 2.0. Sears Canada
continued to focus on its new format by converting two more stores
to the Sears 2.0 concept for a total of four converted stores.
- Initium. An updated sears.ca website launched across
Canada in November 2016.
- Real Estate Transactions. During the fourth quarter of this
year, Sears Canada closed transactions with proceeds of
$62.9 million and $30.9 million (previously announced as
$31.3 million). On March 1, 2017, the Company announced the closing
of a previously-announced transaction for proceeds of $50.0 million for its logistics centre located in
Ville St. Laurent, Quebec. In addition, a transaction for
proceeds of $7.0 million (originally
announced as $8.0 million) closed
during the first quarter of 2017. None of these transactions
is resulting in store closures.
- Cost Reductions. The Company achieved annualized cost
reductions of $159.6 million for
2016, which exceeded the upper range of its targeted annualized
costs savings of $155.0
million. The Company will reinvest some of these cost
savings in new businesses and categories, such as Initium and a new
off-price business (discussed below), intended to drive growth.
- New Off-Price Business and Sears Label Essentials. Two key
merchandising strategies have recently been introduced that
demonstrate Sears leadership as a retailer of high quality products
at sharp price-points. During the second half of 2016, the
Company soft launched an off-price business with a dedicated
merchandising team to bring outstanding deals on designer products
to our customers. In early 2017, the Company formally launched this
business as "The Cut @ Sears", with structured online and in-store
experiences and marketing support. In March 2017, the Company also began rebranding its
private label businesses with the introduction of a new line of
everyday favourites on the Sears Label – key essentials for women,
men, kids and the home. Sears Label essentials are positioned
at elevated quality with prices designed to turn the inventory
quickly.
Fourth Quarter 2016 Financial Results
- Revenue. Revenue was $744.0
million in the fourth quarter, a decline of 16.2% compared
to the same quarter last year. The difference between this
decline and the same stores sales increase of 1.3% was primarily
due to (1) store exits since last year and (2) the decline in
revenues in the Company's Direct business. The decline in the
Direct business was due to (1) a planned and significant reduction
in catalogues versus last year in response to lower customer
demand, (2) operational challenges experienced with the launch of
the new website and back-end logistics technology and (3) a planned
decline in the number of merchandise pick-up locations to reduce
costs.
- Gross Margin. The gross margin rate was 24.7% in the fourth
quarter, as compared to 28.7% for the same quarter last year, a
decrease of 400 bps. The decline was due to a combination of
factors, including expenses incurred in the Direct business to
resolve customer deliveries during the Holiday season, the planned
reduction in catalogues, lower retail prices, and a higher mix of
clearance. The Company is working towards offsetting declines
in legacy catalogue revenue with growth in ecommerce, and to align
merchandise costs with out-the-door selling prices and expects
these efforts to generate higher margins as it progresses through
2017.
- Adjusted EBITDA was a loss of $63.7
million in the fourth quarter compared to a loss of
$51.2 million for the same quarter
last year. Adjusted EBITDA is a non-IFRS measure.
- Net Earnings. The net loss for the fourth quarter this year was
$45.8 million or 45 cents per share compared to net earnings of
$30.9 million or 30 cents per share in the fourth quarter last
year. The fourth quarter last year included a gain on the
termination of the credit card agreement of $170.7 million. For a list of other non-recurring
charges in the fourth quarters of Fiscal 2016 and Fiscal 2015,
please refer to the "Reconciliation of Net (Loss) Earnings to
Adjusted EBITDA" table included in this release.
- Cash Position and Liquidity. Sears Canada ended the fourth quarter with
$235.8 million in cash versus
$313.9 million in cash at the end of
the fourth quarter of last year. Since the end of the
quarter, the Company received $57.0
million from the real estate transactions that closed in the
first quarter of 2017, and $125.0
million from the initial tranche of the up to $300.0 million previously announced term loan,
before transaction fees.
Additional Commentary
The year 2016 was all about
starting to change Sears Canada, and 2017 will be the year that
change is more fully realized. Our focus is on three pillars of
change: product innovation, customer experience, and brand
positioning. We are leveraging these pillars, in addition to
business plans for operational enhancements from our new technology
platform, increased visibility to our supply chain, better sourcing
costs, continued store network and Sears 2.0 in-store footprint
optimization, and overall cost improvements, in order to foster
continued growth in sales and create a path to profitability.
In the past year, we introduced the Cut @ Sears and the new
Sears Label essentials, which have now re-established Sears Canada
with strong product and solid positioning. The Sears Label means
high quality products designed, sourced and sold direct to
customers. The Cut @ Sears means of-the-moment fashion in
limited supply and designer labels at 30-60% less. In our big
ticket businesses – mattresses and appliances – we have designed
our pricing strategies to offer the best prices in Canada, every day. All of these products are
showcased in a reinvented customer experience, which spans across
the new digital ecommerce platform and the new Sears 2.0 in-store
format, as well as a redesigned approach to deliver WOW through
customer service. The Sears brand is re-connecting with
Canadians on a meaningful basis by giving them amazing products to
buy at great prices they can trust.
"Product. Experience. Positioning. Those are
the pillars of change put in place over the past year. The
change is made possible by a major effort to revamp our culture and
leadership," continued Mr. Stranzl. "These cultural principles are
outlined on our website at www.sears.ca/reinvention. Our
16,000 associates make this culture happen every day, and I thank
them for their hard work and focused determination; they should
rightfully be proud of their work in getting Sears Canada growing
again."
About Sears Canada
Sears Canada Inc. is an independent
Canadian online and store retailer whose head office is based in
Toronto. Sears Canada's unique positioning is that it now
offers consumers Sears label products, which are designed and
directly sourced by Sears Canada, and also of-the-moment fashion
and designer labels at 30-60% less in The Cut @ Sears. Sears
Canada also has a top ranked mattress business in Canada, and the number one appliance business
in Canada. Sears Canada is undergoing a reinvention,
including new customer experiences at every touchpoint, a new
e-commerce platform, new store concepts, and a new set of customer
service principles designed to deliver WOW experiences to
customers. Information can be found at
sears.ca/reinvention.
Disclaimer and Cautionary Note Regarding Forward-Looking
Statements
This release contains information which is
forward-looking and is subject to important risks and
uncertainties. Forward-looking information concerns, among other
things, the Company's future financial performance, business
strategy, plans, expectations, goals and objectives. Often,
but not always, forward-looking information can be identified by
the use of words such as "plans", "expects" or "does not expect",
"is expected", "scheduled", "estimates", "intends", "anticipates"
or "does not anticipate" or "believes", or variations of such words
and phrases, or statements that certain actions, events or results
"may", "could", "would", "might" or "will" be taken, occur or be
achieved. Although the Company believes that the estimates
reflected in such forward-looking information are reasonable, such
forward-looking information involves known and unknown risks,
uncertainties and other factors which may cause actual results,
performance or achievements to be materially different from any
future results, performance or achievements expressed or implied by
the forward-looking information and undue reliance should not be
placed on such information.
Factors which could cause actual results to differ materially
from current expectations include, but are not limited to: the
Company's ability to compete effectively in the highly competitive
retail industry; the ability of the Company to successfully
implement its strategic initiatives; the ability of the Company to
enhance its financial flexibility and liquidity, including to
improve its cash position; weaker business performance in the
fourth quarter, traditionally the Company's strongest quarter;
seasonal weather patterns; customer preferences and changes in
consumer spending; ability to achieve productivity improvements and
cost savings; ability to retain senior management and key
personnel; ability of the Company to successfully manage its
inventory levels; ability of the Company to secure an agreement
with a financial institution for the management of the company's
credit and financial services operations; ability to implement and
continue the Company's new consumer financing program; the ability
of the Company's new loyalty program to attract and retain
customers; ability to successfully implement the Company's new
digital e-commerce platform nation-wide; ability of the Company to
migrate sufficient catalogue customers and business to online;
disruptions to the Company's computer systems; economic, social,
and political instability in jurisdictions where suppliers are
located; fire damage to and/or, structural integrity and fire
safety of, foreign factories; increased shipping costs, potential
transportation delays and interruptions; damage to the reputations
of the brands the Company sells; changes in the Company's
relationship with its suppliers; the Company's reliance on third
parties in outsourcing arrangements, and their ability to perform
the arrangements for which they have been engaged; the
creditworthiness and financial stability of the Company's licensees
and business partners; willingness of the Company's vendors
to provide acceptable payment terms; the outcome of product
liability claims; loss of reputation resulting from security or
data breaches or loss of customer information; failure of the
Company's IT systems; fraud or theft resulting from weaknesses in
the Company's payment systems; effect of long-term leases on the
Company's ability to respond to changing demographics; failure to
comply with operating covenants in the Company's leases; changes in
laws, rules and regulations applicable to the Company; loss of the
Company's status as a foreign private issuer; compliance costs
associated with environmental laws and regulations; the outcome of
pending legal proceedings; maintaining adequate insurance coverage;
changes to customer spending patterns due to domestic or
international events outside the Company's control; ability to
make, integrate and maintain acquisitions and investments; general
economic conditions; liquidity risk and failure to fulfill
financial obligations; limits on the Company's access to financing
sources; fluctuations in foreign currency exchange rates; failure
of counterparties to meet their payment obligations to the Company;
the possibility of negative investment returns in the Company's
pension plan or an increase to the defined benefit obligation
including the potentially restrictive impact such an increase might
have on credit availability; interest rate fluctuations and other
changes in funding costs and investment income; the impairment of
intangible and other long lived assets; the possible future
termination of certain intellectual property rights associated with
the "Sears" name and brand names if Sears Holdings Corporation
("Sears Holdings") reduces its interest in the Company to less than
10%; potential conflict of interest of some of the directors and
executive officers of the Company owing to their ownership of Sears
Holdings' common stock; possible changes in the Company's ownership
by Edward S. Lampert, ESL
Investments, Inc. ("ESL") and other significant shareholders; price
and volume volatility of the Company's common shares; new
accounting pronouncements, or changes to existing pronouncements,
that impact the methods the Company uses to report our financial
position and results from operations; and uncertainties associated
with critical accounting assumptions and estimates. Information
about these factors, other material factors that could cause actual
results to differ materially from expectations and about material
factors or assumptions applied in preparing forward-looking
information, may be found in this release as well as under Section
3(k) "Risk Factors" in the Company's most recent AIF,
Section 9 "Risks and Uncertainties" in the MD&A in the
Company's most recent annual report and under Section 9 "Risks and
Uncertainties" in the MD&A in the Company's most recent interim
report and elsewhere in the Company's filings with Canadian and
U.S. securities regulators.
All of the forward-looking statements included in this release
are qualified by these cautionary statements and those made in the
"Risk Factors" section of the Company's most recent AIF, in the
"Risks and Uncertainties" section of the Company's most recent
annual and interim MD&A and the Company's other filings with
Canadian and U.S. securities regulators. These factors are not
intended to represent a complete list of the factors that could
affect the Company; however, these factors should be considered
carefully, and readers should not place undue reliance on
forward-looking statements made herein or in our other filings with
Canadian and U.S. securities regulators. The forward-looking
information in this release is, unless otherwise indicated, stated
as of the date hereof and is presented for the purpose of assisting
investors and others in understanding the Company's financial
position and results of operations as well as the Company's
objectives and strategic priorities, and may not be appropriate for
other purposes. The Company does not undertake any obligation to
update publicly or to revise any forward looking information,
whether as a result of new information, future events or otherwise,
except as required by
law.
Consolidated Financial Statements and Management's Discussion
and Analysis
The Company's audited consolidated financial
statements for the 52-week period ended January 28, 2017 and Management's Discussion and
Analysis thereon are available on the System for Electronic
Document Analysis and Retrieval website at www.sedar.com and on the
U.S. Securities Exchange Commission website at www.sec.gov.
Selected Consolidated Financial Information
The
following tables set out summary unaudited consolidated financial
information and supplemental information for the periods indicated,
derived from the audited consolidated financial statements for the
52-week period ended January 28,
2017. The summary unaudited consolidated financial
information set out for these periods has been prepared on a basis
consistent with our audited consolidated financial statements for
the 52-week period ended January 28, 2017. The information
presented herein does not contain disclosures required by IFRS and
should be read in conjunction with the Company's audited
consolidated financial statements for the 52-week period ended
January 28, 2017.
SEARS CANADA
INC.
RECONCILIATION OF NET (LOSS) EARNINGS TO ADJUSTED
EBITDA
For the 13 and 52-week periods ended January
28, 2017 and January 30, 2016
Unaudited
|
Fourth
Quarter
|
Fiscal
|
(in CAD millions,
except per share amounts)
|
2016
|
2015
|
2016
|
2015
|
Net (loss)
earnings
|
$
|
(45.8)
|
$
|
30.9
|
$
|
(321.0)
|
$
|
(67.9)
|
|
Transformation
expense1
|
9.3
|
9.7
|
44.2
|
16.5
|
|
Gain on termination
of credit card arrangement2
|
—
|
(170.7)
|
—
|
(170.7)
|
|
Gain on lease
termination and sale and leaseback
transactions3
|
(59.9)
|
—
|
(105.9)
|
(67.2)
|
|
Gain on settlement of
retirement benefits4
|
—
|
—
|
—
|
(5.1)
|
|
Asset held for sale
impairment5
|
2.3
|
3.8
|
7.3
|
3.8
|
|
Other asset
impairment6
|
27.7
|
74.6
|
45.0
|
74.6
|
|
Warehouse impairment
reversal7
|
—
|
(15.1)
|
—
|
(15.1)
|
|
TBI
costs8
|
—
|
—
|
—
|
6.4
|
|
Environmental
remediation costs9
|
(2.8)
|
3.2
|
(1.0)
|
3.2
|
|
Lease exit
costs10
|
2.9
|
—
|
12.6
|
—
|
|
Depreciation and
amortization expense
|
7.3
|
11.1
|
31.4
|
48.4
|
|
Finance
costs
|
0.3
|
2.1
|
8.9
|
9.7
|
|
Interest
income
|
(2.6)
|
(0.3)
|
(7.2)
|
(2.3)
|
|
Income tax (recovery)
expense
|
(2.4)
|
(0.5)
|
2.8
|
5.2
|
Adjusted
EBITDA11
|
$
|
(63.7)
|
$
|
(51.2)
|
$
|
(282.9)
|
$
|
(160.5)
|
Basic net (loss)
earnings per share
|
$
|
(0.45)
|
$
|
0.30
|
$
|
(3.15)
|
$
|
(0.67)
|
|
|
1
|
Transformation
expense during Fiscal 2016 and Fiscal 2015 relates primarily to
severance costs incurred during the period.
|
2
|
Gain on
termination of credit card arrangement represents the net gain on
the sale of JPMorgan Chase's portfolio of credit card accounts and
related receivables related to the Sears credit card and Sears
Mastercard during Fiscal 2015.
|
3
|
Gain on lease
termination and sale and leaseback transactions represents the net
gain related to a lease termination and selling and leasing back
certain properties owned by the Company during Fiscal 2016 and
Fiscal 2015.
|
4
|
Gain on settlement
of retirement benefits relates to the settlement of retirement
benefits of eligible members covered under the non-pension
retirement plan during Q1 2015.
|
5
|
Asset held for
sale impairment represents the charge related to writing down the
carrying value of the property, plant and equipment of one retail
store and certain logistics centres to fair value less costs to
sell during Fiscal 2016 and Fiscal 2015.
|
6
|
Other asset
impairment represents the charge related to writing down the
carrying value of the property, plant and equipment and intangibles
of certain cash generating units during Fiscal 2016 and Fiscal
2015.
|
7
|
Warehouse
impairment reversal represents the partial reversal during Fiscal
2015 of the charge related to writing down the carrying value of
the property, plant and equipment of the Montreal warehouse during
Fiscal 2014 to fair value less costs to sell.
|
8
|
TBI costs
represent the estimated costs to the Company related to
TravelBrands Inc. (a licensee of the Company) filing for creditor
protection during Fiscal 2015.
|
9
|
Environmental
remediation costs in Fiscal 2015 relate to estimated costs required
to restore the Park Street Logistics Centre located in Regina, in
order to sell the property in Fiscal 2016. Reversal of
environmental remediation costs were made in Fiscal 2016 based on
actual environmental remediation costs incurred. The Park Street
Logistics Centre was sold during Fiscal 2016.
|
10
|
Lease exit costs
relate primarily to costs incurred to exit certain properties
during Fiscal 2016.
|
11
|
Adjusted EBITDA is
a measure used by management, the retail industry and investors as
an indicator of the Company's operating performance, ability to
incur and service debt, and as a valuation metric. Adjusted EBITDA
is a non-IFRS measure.
|
SEARS CANADA
INC.
RECONCILIATION OF TOTAL MERCHANDISING REVENUE TO TOTAL
SAME STORE SALES
For the 13 and 52-week periods ended January
28, 2017 and January 30, 2016
Unaudited
|
Fourth
Quarter
|
Fiscal
|
(in CAD
millions)
|
2016
|
2015
|
2016
|
2015
|
Total merchandising
revenue
|
$
|
744.0
|
$
|
887.6
|
$
|
2,613.6
|
$
|
3,145.7
|
|
Non-comparable
sales
|
110.3
|
194.1
|
529.0
|
708.5
|
|
Total same store
sales1
|
633.7
|
693.5
|
2,084.6
|
2,437.2
|
|
|
|
|
|
Percentage change in
total same store sales
|
1.3%
|
(1.6)%
|
(4.3)%
|
(2.3)%
|
Percentage change in
total same store sales by category
|
|
|
|
|
|
Apparel &
Accessories
|
(1.5)%
|
0.4%
|
(5.9)%
|
(4.6)%
|
|
Home &
Hardlines
|
4.0%
|
(3.5)%
|
(3.3)%
|
(0.7)%
|
|
|
|
|
|
Percentage change in
Core Retail same store sales
|
0.9%
|
(0.8)%
|
(4.9)%
|
(0.6)%
|
Percentage change in
Core Retail same store sales by category
|
|
|
|
|
|
Apparel &
Accessories
|
(1.7)%
|
2.9%
|
(5.3)%
|
(1.5)%
|
|
Home &
Hardlines
|
3.9%
|
(5.1)%
|
(4.9)%
|
—%
|
|
|
1
|
Total same store
sales represents merchandise sales generated through operations in
the Company's Full-line, Sears Home, Hometown, Outlet and Corbeil
stores that were continuously open during both of the periods being
compared. Core Retail same store sales represents merchandise sales
generated through operations in the Company's Full-line and Sears
Home stores that were continuously open during both of the periods
being compared. More specifically, the same store sales metrics
compare the same calendar weeks for each period and represents the
13 and 52-week periods ended January 28, 2017 and January 30, 2016.
The calculation of same store sales is a performance metric and may
be impacted by store space expansion and contraction. The same
store sales metrics exclude the Direct channel.
|
SEARS CANADA
INC.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
Unaudited
(in CAD
millions)
|
As at
January 28, 2017
|
As at
January 30, 2016
|
ASSETS
|
|
|
Current
assets
|
|
|
Cash
|
$
|
235.8
|
$
|
313.9
|
Accounts receivable,
net
|
67.1
|
59.4
|
Income taxes
recoverable
|
12.3
|
35.9
|
Inventories
|
598.5
|
664.8
|
Prepaid
expenses
|
34.5
|
31.0
|
Derivative financial
assets
|
0.1
|
6.6
|
Assets classified as
held for sale
|
57.0
|
22.1
|
Total current
assets
|
1,005.3
|
1,133.7
|
Non-current
assets
|
|
|
Property, plant and
equipment
|
227.1
|
444.1
|
Investment
properties
|
2.0
|
17.0
|
Intangible
assets
|
2.0
|
22.5
|
Deferred tax
assets
|
0.7
|
0.6
|
Other long-term
assets
|
7.3
|
15.3
|
Total
assets
|
$
|
1,244.4
|
$
|
1,633.2
|
LIABILITIES
|
|
|
Current
liabilities
|
|
|
Accounts payable and
accrued liabilities
|
$
|
319.8
|
$
|
332.7
|
Deferred
revenue
|
136.1
|
158.3
|
Provisions
|
61.6
|
75.8
|
Income taxes
payable
|
0.6
|
2.6
|
Other taxes
payable
|
22.3
|
17.3
|
Derivative financial
liabilities
|
0.6
|
—
|
Current portion of
long-term obligations
|
3.7
|
4.0
|
Total current
liabilities
|
544.7
|
590.7
|
Non-current
liabilities
|
|
|
Long-term
obligations
|
16.6
|
20.2
|
Deferred
revenue
|
69.4
|
74.2
|
Retirement benefit
liability
|
308.6
|
326.9
|
Other long-term
liabilities
|
82.9
|
67.0
|
Total
liabilities
|
1,022.2
|
1,079.0
|
SHAREHOLDERS'
EQUITY
|
|
|
Capital
stock
|
14.9
|
14.9
|
Share-based
compensation reserve
|
3.1
|
—
|
Retained
earnings
|
418.0
|
739.0
|
Accumulated other
comprehensive loss
|
(213.8)
|
(199.7)
|
Total
shareholders' equity
|
222.2
|
554.2
|
Total liabilities
and shareholders' equity
|
$
|
1,244.4
|
$
|
1,633.2
|
SEARS CANADA
INC.
CONSOLIDATED STATEMENTS OF NET (LOSS) EARNINGS AND
COMPREHENSIVE LOSS (INCOME)
For the 13 and 52-week periods ended January
28, 2017 and January 30, 2016
Unaudited
|
13-Week
Period
|
52-Week
Period
|
(in CAD millions,
except per share amounts)
|
2016
|
2015
|
2016
|
2015
|
Revenue
|
$
|
744.0
|
$
|
887.6
|
$
|
2,613.6
|
$
|
3,145.7
|
Cost of goods and
services sold
|
560.6
|
632.5
|
1,900.5
|
2,145.9
|
Selling,
administrative and other expenses
|
293.8
|
393.6
|
1,135.5
|
1,298.1
|
Operating
loss
|
(110.4)
|
(138.5)
|
(422.4)
|
(298.3)
|
|
|
|
|
|
Gain on lease
termination and sale and leaseback transactions
|
59.9
|
—
|
105.9
|
67.2
|
Gain on termination
of credit card arrangement
|
—
|
170.7
|
—
|
170.7
|
Gain on settlement of
retirement benefits
|
—
|
—
|
—
|
5.1
|
Finance
costs
|
0.3
|
2.1
|
8.9
|
9.7
|
Interest
income
|
2.6
|
0.3
|
7.2
|
2.3
|
(Loss) earnings
before income taxes
|
(48.2)
|
30.4
|
(318.2)
|
(62.7)
|
|
|
|
|
|
Income tax recovery
(expense)
|
|
|
|
|
|
Current
|
2.8
|
(0.8)
|
(0.3)
|
(8.1)
|
|
Deferred
|
(0.4)
|
1.3
|
(2.5)
|
2.9
|
|
2.4
|
0.5
|
(2.8)
|
(5.2)
|
Net (loss)
earnings
|
$
|
(45.8)
|
$
|
30.9
|
$
|
(321.0)
|
$
|
(67.9)
|
|
|
|
|
|
Basic and diluted net
(loss) earnings per share
|
$
|
(0.45)
|
$
|
0.30
|
$
|
(3.15)
|
$
|
(0.67)
|
|
|
|
|
|
Net (loss)
earnings
|
$
|
(45.8)
|
$
|
30.9
|
$
|
(321.0)
|
$
|
(67.9)
|
|
|
|
|
|
Other comprehensive
(loss) income, net of taxes:
|
|
|
|
|
|
|
|
|
|
Items that may
subsequently be reclassified to net (loss) earnings:
|
|
|
|
|
|
(Loss) gain on
foreign exchange derivatives
|
(0.9)
|
10.2
|
(12.6)
|
19.2
|
|
Reclassification to
net (loss) earnings of (gain) loss on foreign exchange
derivatives
|
(0.7)
|
(7.9)
|
5.0
|
(18.7)
|
|
|
|
|
|
Items that will not
subsequently be reclassified to net (loss) earnings:
|
|
|
|
|
|
Remeasurement (loss)
gain on net defined retirement benefit liability
|
(6.5)
|
48.8
|
(6.5)
|
50.8
|
|
|
|
|
|
Total other
comprehensive (loss) income, net of taxes
|
(8.1)
|
51.1
|
(14.1)
|
51.3
|
Total
comprehensive (loss) income
|
$
|
(53.9)
|
$
|
82.0
|
$
|
(335.1)
|
$
|
(16.6)
|
SEARS CANADA
INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the 13 and 52-week periods ended January
28, 2017 and January 30,
2016
Unaudited
|
13-Week
Period
|
52-Week
Period
|
(in CAD
millions)
|
2016
|
2015
|
2016
|
2015
|
Cash flow
generated from (used for) operating activities
|
|
|
|
|
|
Net (loss)
earnings
|
$
|
(45.8)
|
$
|
30.9
|
$
|
(321.0)
|
$
|
(67.9)
|
|
Adjustments
for:
|
|
|
|
|
|
|
Depreciation and
amortization expense
|
7.3
|
11.1
|
31.4
|
48.4
|
|
|
Share-based
compensation
|
0.3
|
—
|
3.1
|
(0.4)
|
|
|
(Gain) loss on
disposal of property, plant and equipment
|
(2.7)
|
—
|
(4.4)
|
0.3
|
|
|
Net impairment
losses
|
30.0
|
63.3
|
52.3
|
63.3
|
|
|
Gain on lease
termination and sale and leaseback transactions
|
(59.9)
|
—
|
(105.9)
|
(67.2)
|
|
|
Gain on termination
of credit card arrangement
|
—
|
(170.7)
|
—
|
(170.7)
|
|
|
Finance
costs
|
0.3
|
2.1
|
8.9
|
9.7
|
|
|
Interest
income
|
(2.6)
|
(0.3)
|
(7.2)
|
(2.3)
|
|
|
Retirement benefit
plans expense
|
3.4
|
4.8
|
14.1
|
18.9
|
|
|
Gain on settlement of
retirement benefits
|
—
|
—
|
—
|
(5.1)
|
|
|
Short-term disability
expense
|
1.1
|
1.4
|
4.6
|
4.9
|
|
|
Income tax (recovery)
expense
|
(2.4)
|
(0.5)
|
2.8
|
5.2
|
|
Interest
received
|
2.8
|
0.2
|
7.4
|
1.1
|
|
Interest
paid
|
(1.0)
|
(0.8)
|
(3.4)
|
(2.7)
|
|
Retirement benefit
plans contributions
|
(10.0)
|
(12.0)
|
(43.5)
|
(48.6)
|
|
Income tax refunds,
net
|
2.0
|
3.1
|
25.0
|
87.6
|
|
Changes in non-cash
working capital balances
|
78.5
|
150.1
|
0.1
|
(64.3)
|
|
Changes in non-cash
long-term assets and liabilities
|
0.9
|
(3.0)
|
(5.7)
|
(11.7)
|
|
2.2
|
79.7
|
(341.4)
|
(201.5)
|
Cash flow
generated from investing activities
|
|
|
|
|
|
Purchases of
property, plant and equipment and intangible assets
|
(12.0)
|
(15.3)
|
(27.4)
|
(45.4)
|
|
Proceeds from sale of
property, plant and equipment
|
0.4
|
0.1
|
3.1
|
0.3
|
|
Proceeds from
termination of credit card arrangement
|
—
|
174.0
|
—
|
174.0
|
|
Net proceeds from
lease termination and sale and leaseback transactions
|
93.5
|
—
|
295.0
|
130.0
|
|
81.9
|
158.8
|
270.7
|
258.9
|
Cash flow used for
financing activities
|
|
|
|
|
|
Interest paid on
finance lease obligations
|
(0.4)
|
(0.4)
|
(1.7)
|
(1.9)
|
|
Repayment of
long-term obligations
|
(1.0)
|
(0.9)
|
(3.9)
|
(3.9)
|
|
(1.4)
|
(1.3)
|
(5.6)
|
(5.8)
|
Effect of exchange
rate on cash at end of period
|
(1.9)
|
2.1
|
(1.8)
|
3.3
|
Increase
(decrease) in cash
|
80.8
|
|
239.3
|
|
(78.1)
|
|
54.9
|
Cash at beginning
of period
|
$
|
155.0
|
$
|
74.6
|
$
|
313.9
|
$
|
259.0
|
Cash at end of
period
|
$
|
235.8
|
$
|
313.9
|
$
|
235.8
|
$
|
313.9
|
SOURCE Sears Canada Inc.