Sears Holdings narrowed its net loss in the fourth quarter, but the parent company of Sears and Kmart continued to face declines in sales stemming from lower store counts and a challenging retail environment.
For the quarter ended January 28, the company reported a net loss of $137 million ($1.28 per share) compared to a net loss of $181 million ($1.70 per share) in the comparable quarter the prior year. Adjusted EBITDA was a loss of $61 million for the quarter compared with a loss of $137 million in the same quarter the year prior.
Company-wide revenues were $6.1 billion for the fourth quarter, compared to $7.3 billion for the prior year fourth quarter. The year-over-year decline in revenues was primarily attributable to having fewer Kmart and Sears full-line stores in operation, which accounted for $596 million of the revenue decline, as well as a 10.3% decline in comparable store sales for the quarter, which accounted for $555 million of the revenue decline.
At Kmart, comparable store sales decreased 8% during the fourth quarter primarily driven by declines in the consumer electronics, grocery and household, apparel and toys categories. Sears domestic comparable store sales decreased 12.3% during the quarter, primarily driven by declines in the home appliances, apparel, consumer electronics and tools categories.
“We delivered significant adjusted EBITDA improvement in the fourth quarter, reflecting our firm focus on profitability to offset ongoing revenue pressures,” said Edward Lampert, chairman and CEO of Sears Holdings. “Building on this positive momentum, we are taking decisive actions to become a more agile and competitive retailer with a clear path toward profitability.”
For the full year, revenues were $22.1 billion in 2016 as compared to revenues of $25.1 billion in the prior year. The decline in revenues included a decrease of $1.3 billion as a result of having fewer Kmart and Sears full-line stores in operation. For the full year, comparable store sales declined 7.4%, which contributed to $1.4 billion of the revenue decline relative to the prior year.
Kmart comparable store sales declined 5.3% for the full year, primarily driven by declines in the grocery and household, consumer electronics and pharmacy categories. Sears domestic comparable store sales for the year declined 9.3%, primarily driven by decreases in the home appliances, apparel and consumer electronics categories.
