Sears Holdings reported more bad news as it posted third quarter results.
The company announced a net loss attributable to Sears Holdings shareholders of $748 million, or $6.99 per diluted share, for the third quarter versus a net loss attributable to shareholders of $454 million, or $4.26 per diluted share, for the year-earlier period. Adjusted loss per share attributable to Sears Holdings shareholders was $333 million, or $3.11 per diluted share, versus a net loss attributable to shareholders of $305 million, or $2.86 per diluted share, in the previous year third quarter.
Still, the loss was better than anticipated in the analyst average estimate from Thomson Reuters, which was for $4.06 per diluted share.
Comparable sales decreased 7.4%, with Kmart comps down 4.4% and Sears full-line store comps down 10%. Kmart suffered comp declines in the grocery and household, consumer electronics and pharmacy categories partially offset by relatively strong performances in apparel, jewelry and outdoor living. Sears comp declines resulted largely from weakness in home appliances, apparel and consumer electronics categories.
Revenues tumbled to $5 billion from $5.8 billion in the year-prior third quarter, with the effect of fewer Kmart and Sears full-line stores in operation and comp declines factoring in the decline.
In regards to operations, Sears Holdings stated that it remains committed to reconfiguring the company through its Shop Your Way membership program and leveraging the value of its store base as well as through options that recognize the company’s inherent asset value.
Among the moves Sears has made recently that the company emphasized in its earnings announcement: A deal with Citi Retail Services that offers Sears MasterCard holders who are part of its Shop Your Way loyalty program ways to earn more Shop Your Way points at a variety of outside businesses; a strategic relationship with Uber Technologies that allows its drivers and riders to earn Shop Your Way points on trips arranged through the ride company; and expansion of the Home Services business including home warranty offerings.
Edward Lampert, Sears Holdings chairman and CEO, said, “We remain fully committed to restoring profitability to our company and are taking actions such as reducing unprofitable stores, reducing space in stores we continue to operate, including through the Seritage lease arrangement, reducing investments in underperforming categories and improving gross margin performance, and managing expenses relative to sales in key categories. While many observers have acknowledged the significant asset base of our company, we understand the concerns related to our operating performance and are committed to transforming our company through our Shop Your Way membership program and our integrated retail investments. At the same time, we will continue to explore options to recognize the inherent asset value in a manner that complements our transformation.”
Jason Hollar, Sears Holdings CFO, said, “We will continue to take actions to generate liquidity, adjust our overall capital structure and manage our business while meeting all of our financial obligations. Actions may include additional expense reductions, financing transactions and asset monetization including exploring alternatives for our Kenmore, Craftsman and DieHard brands, our Sears Home Services business, and our real estate portfolio.”
