Sears' Loss Widens on Sluggish Sales

Thursday, 21 Aug 2014 07:47 AM

 

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Sears said Thursday that its second-quarter loss widened as it continues to deal with weak sales.

The retailer — which runs Sears and Kmart stores — lost $573 million, or $5.39 per share, for the period ended Aug. 2. That compares with a loss of $194 million, or $1.83 per share, a year earlier.

Chairman and CEO Edward Lampert said in a statement that the second-quarter performance was unacceptable, even though the chain has showed progress with its transformation. The Hoffman Estates, Illinois, company is still working to turn itself around, with efforts including lowering costs, investing in its loyalty program and improving prices and promotions.

Sears is looking to shift away from its focus on running a store network to operating a member-focused business called Shop Your Way. Sales to Shop Your Way members climbed to 73 percent of eligible sales, compared with 71 percent a year earlier.

Lampert, a billionaire hedge fund investor, combined Sears and Kmart in 2005, about two years after he helped bring Kmart out of bankruptcy. But it has faced mounting pressure from nimbler rivals like Wal-Mart Stores and Home Depot.

Revenue declined 10 percent to $8 billion from $8.87 billion. One bright spot was online and multi-channel sales, which increased 18 percent.

Sales at Kmart stores open at least a year fell 1.7 percent. Excluding consumer electronics and the grocery and household goods business, the metric dipped 1 percent.

At Sears locations, the figure edged up 0.1 percent. Sales at stores open at least a year is a key indicator of a retailer's health because it excludes results from stores recently opened or closed.

Sears Holdings Inc. says it is still looking at options for its auto center business and Sears Canada.

Its stock declined 44 cents to $35.51 in premarket trading.

© Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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