Even as Kmart, one of the pioneers in discount store retailing, marks its 50th anniversary, its future and that of its corporate parent, Sears Holdings, is uncertain.

Even as Kmart, one of the pioneers in discount store retailing, marks its 50th anniversary, its future and that of its corporate parent, Sears Holdings, is uncertain.

Financial results for the company’s latest fiscal year, which were released late last month, were dismal. Sales continued the long, steady decline that has characterized the era that began in 2005 when Edward Lampert, a noted hedge fund manager, merged Kmart and the Sears department store chain. Revenues fell $518 million to $12.5 billion in the fourth quarter and $1.1 billion to $41.6 billion for the full year. During Lampert’s tenure, Sears Holdings’ annual volume has decreased by more than $12 billion.

Comparable-store sales trends were equally alarming. Kmart saw that metric decline 2.7% in the quarter and 1.4% for the year, while Sears’ results in the United States were down 4.1% and 3%, respectively.

The impact of those numbers is finally starting to show up on the bottom line. A net loss from continuing operations of $3.1 billion for the fiscal year was the first since Sears Holdings was created. Red ink for the fourth quarter totaled $2.4 billion.

Despite the abysmal performance, the company retains the confidence of Wall Street. Sears Holdings’ stock actually rose substantially in the immediate aftermath of the earnings announcement. Investors were apparently impressed by plans to spin off additional Sears business units, a process that began with last year’s sale of Orchard Supply Hardware Stores and is expected to eventually raise some $500 million, and the sale of 11 store locations to General Growth Properties for $270 million. The thinking appears to be that the company controls proprietary brands, real estate and other assets that have a lot of latent value that has yet to be tapped.

Lampert may well be the man to unlock that potential, but, after seven years at the helm, it’s clear he’s not going to return two of America’s once iconic retail brands to their former luster.

No merchant can long endure a combination of falling sales and fixed costs, and that doesn’t even take account of the fact that retailers need to continually invest in improving the shopping experience. Unless things change drastically — and quickly — Kmart and Sears appear to be headed for a harsh day of ­reckoning.