Inside This Issue - News
Kmart sees lackluster sales results
September 5th, 2011
HOFFMAN ESTATES, Ill. – Kmart turned in a flat sales performance for the second quarter.
The discount store chain, part of Sears Holdings Corp., posted total revenue of just over $3.62 billion for the quarter ended July 30, compared with $3.63 billion in the prior-year period.
Kmart’s same-store sales came in flat for the quarter, with gains in such categories as outdoor living, grocery and household, tools, appliances, and footwear offset by decreases in the consumer electronics, pharmacy and drug categories, Sears Holdings said.
Also in the second quarter Kmart reported a $16 million operating loss compared to $19 million in operating income a year earlier. The chain’s gross margin rate fell 160 basis points in the 2011 quarter, mainly because of increased promotional and clearance markdowns in apparel and home, as well as declines in other categories, the company said.
Sears Holdings shut 10 Kmart stores as part of 29 store closings during the second quarter. The company also converted 14 Sears Grand locations to Kmart stores.
Overall, Sears Holdings saw its revenue dip 1.2% to $10.33 billion in the second quarter from nearly $10.46 billion a year ago. Total domestic same-store sales were down 0.7% year over year, which the company noted was an improvement from a 3.6% decline in the first quarter.
The decrease in total revenue for the second quarter stemmed mainly from the decrease in domestic same-store sales and having fewer Kmart and Sears full-line stores in operation, as well as a 5.8% decline in comparable-store sales at Sears Canada, the company said. Domestic same-store sales got a lift of 60 basis points from a 32% gain in Kmart.com and Sears.com online sales shipped directly to customers.
Sears Holdings reported an operating loss of $177 million in the second quarter, compared to operating profit of $5 million a year earlier.