Loss widens at Sears Holdings

With fewer Kmart and Sears full-line stores, Sears Holdings revenues declined 6.3% to $8.871 billion in the second quarter ended Aug. 3. 

The company also saw domestic comparable-store sales decline 1.5% -- down 2.1% at Kmart and down 0.8% at Sears Domestic.

The company posted a net loss of $194 million, compared with a net loss of $132 million in the same quarter last year. Year to date, the company reported a net loss of $473 million.

Still, CEO and Chairman Eddie Lampert described progress. 

The company said its online business on sears.com and kmart.com grew 20% over the prior-year second quarter.           

“We made meaningful progress this quarter in our transformation to a member-centric company,” he said. “Shop Your Way members represented over 65% of our sales and they redeemed rewards points at a significantly higher rate than last year. While the increase in Shop Your Way promotional activity and member redemptions resulted in a meaningful increase in our costs, it demonstrates that our members are deepening their engagement with our program which will allow us to further accelerate our transformation. At the same time, we recognize how important it is to improve the profitability of our company, and I am disappointed that we did not deliver a better result."

Sears Domestic comparable-store sales declined 0.8% due to a decrease in the home appliance category, which was partially offset by increases in the lawn & garden, apparel and home categories.

Revenues were also affected by the separation of Sears Hometown and Outlet Stores (SHO), which occurred in the third quarter of 2012 and accounted for $195 million of the decline. 

Sears currently operates 1,195 Kmart stores, and 841 Sears Domestic stores. Last year, it had 1,261 Kmart stores and 2,096 Sears Domestic stores. 

Login or Register to post a comment.