Dec 4, 2014
Cost cuts help
Sears post smaller-than-estimated loss
Dec 4, 2014
Sears Holdings Corp reported a quarterly net loss of $548 million, less than it had estimated last month, as the struggling retailer cuts costs after years of sluggish sales.
Sears had said that it was expecting a loss of $590 million-$630 million attributable to shareholders for the third quarter ended Nov. 1.
" ... We are seeing an improving (earnings before interest, tax, depreciation and amortization) trend, which we expect to continue in the fourth quarter," Chief Executive Eddie Lampert said on a pre-recorded call on Thursday.
Sears, owned 48.5 percent by Lampert and his hedge fund, has been selling assets to turn around its business.
The company said in October that it would cut stake in its loss-making Canada unit to shore up liquidity going into the holiday shopping season.
Over the past year, Sears has also separated its Land's End clothing business and shut some Kmart and Sears stores.
These steps helped the company cut total expenses by 12 percent in the quarter. Sears said it had generated $2.2 billion in liquidity in its fiscal 2014 so far from asset sales and other actions.
The company, once the largest U.S. retailer by revenue, has seen sales drop due to stiff competition from Target Corp, Wal-Mart Stores Inc and Home Depot Inc. Online retailers such as Amazon.com Inc have also eaten into its business.
Sears said last month it might sell up to 300 stores to a newly created real estate investment trust (REIT), which would then lease the properties back to Sears. A final decision on the move is pending.
If the company completes the plan, it will own 400-500 stores and lease 1,300-1,400 stores, Chief Financial Officer Rob Schriesheim said on a call on Thursday.
Sears had 1,050 Kmart stores and 781 Sears stores in the United States as of Nov. 1.
U.S. same-store sales fell 0.1 percent, in line with its forecast. Same-store sales rose 0.5 percent at Kmart stores, but fell 0.7 percent at Sears stores in the United States.
Revenue fell for the twelfth straight quarter, dropping 13 percent to $7.21 billion. Analysts on average had expected $6.88 billion, according to Thomson Reuters I/B/E/S.
Sears shares closed at $34.25 on Wednesday on the Nasdaq.
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