Sears reported a double-digit decline in comparable sales for the second quarter, citing a “retail environment [that] remained challenging, with continued softness in store traffic and elevated price competition.”
The department store chain also announced on Thursday that it will be closing an additional 28 Kmart stores this year. This is in addition to the 180 Sears and Kmart stores that have already been shuttered this year, and the 150 stores that are slated to be closed by the end of the third quarter.
In an attempt to return to profitability, Sears has been trimming its real estate portfolio and seeking additional liquidity.
Here’s what Sears reported compared to what Wall Street was expecting, based on a Thomson Reuters survey of analysts:
- An adjusted loss of $1.16 a share, compared with a forecast loss of $2.48 per share.
- Revenue was $4.37 billion, versus an estimate of $4.21 billion.
- Same-store sales fell 11.5 percent, worse than the expected 7.1 percent decline.
“We are making progress on the strategic priorities we outlined earlier this year and remain focused on returning our Company to profitability,” Sears Holdings CEO Eddie Lampert said in a statement.
“While the third quarter has historically been our most difficult quarter over the past several years, we are working towards making meaningful improvement in our performance this year as a result of the restructuring actions we have put in place.”
Net loss attributable to Sears narrowed to $251 million, or $2.34 per share, in the second quarter, from $395 million, or $3.70 per share, one year ago. Excluding one-time charges, the retailer lost $1.16 a share.
Total sales fell to $4.37 billion, from $5.66 billion, primarily due to store closures, Sears said.
Same-store sales — a metric closely watched by the Street for retail stocks — fell 11.5 percent overall for the second quarter. This included a decline of 9.4 percent for Kmart stores, and a decline of 13.2 percent at Sears stores, the company said.
Sears’ deteriorating financial conditions forced the retailer earlier this year to disclose in a filing with the Securities and Exchange Commission that there was “substantial doubt” about its ability to “continue as a going concern.”
Met with fears by the Street that a bankruptcy was looming, Sears countered by saying it remained focused on trying to improve its business, saying the language was in adherence to regulatory standards.
Just last month, Sears said it would begin selling Kenmore-branded and Alexa-enabled appliances on Amazon.
As of Wednesday’s market close, shares of Sears have fallen more than 40 percent over the past 12 months. The stock, though, has managed to make up for all of those losses, and more, over the past three months.
Source: FactSet
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