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Sears Holdings halves quarterly loss despite weak sales
August 19th, 2010
HOFFMAN ESTATES, Ill. – Sears Holdings Corp. slashed its second-quarter loss by more than half but the improvement fell short of analysts’ expectations as weak consumer spending hampered sales.
The operator of Sears department stores and Kmart discount outlets reported a quarterly net loss of $39 million, or 35 cents per diluted share, compared with a loss of $94 million, or 79 cents per share, in the fiscal 2009 period. Consolidated sales slipped 0.9% to $10.5 billion, reflecting fewer stores in operation than a year ago as well as a 1.4% decline in same-store sales at Kmart and a 2.8% decrease at Sears.
The same-store sales dip at Kmart was the first in three quarters, and management blamed it on a poor performance in food and consumables that was partially offset by increases in apparel, footwear and toys. The Sears decline was driven by weakness in power lawn and garden, tools and consumer electronics. Home appliances, though, managed a low-single-digit increase.
"Kmart continued to improve its performance during the second quarter, as animprovement in its gross margin rate led to increased profitability," said W. Bruce Johnson, interim chief executive officer and president. "Overall, our total revenues declined only slightly despite the uncertain economic environment faced by our customers."
Excluding one-time expense items such as pension expense closed store reserve and severance, the adjusted loss per share was 19 cents, a penny worse than the consensus estimate of analysts polled by Thomson Reuters.