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Sears Reports Wider Loss, May Close More Stores

Sears Holdings Corp. Ahead of Earnings Figures
Daniel Acker/Bloomberg via Getty Images
HOFFMAN ESTATES, Ill. -- Sears' first-quarter loss widened as the beleaguered retailer's sales declined amid its ongoing struggle to attract shoppers.

Sears Holdings, which operates Kmart and its namesake stores, has been cutting costs, reducing inventory and selling assets to return to profit. At the same time, it's shifting away from its focus on running a store network into a member-focused business.

The latest results show the heavy challenges that remain.

Chairman and CEO Edward Lampert said in a statement Thursday that Sears (SHLD) is seeing progress in its shift to a member-focused business, with first-quarter member sales comprising 74 percent of eligible sales -- the highest level ever.

The executive said the biggest drag on sales has occurred in the consumer electronics businesses at its Kmart and Sears stores.

The Hoffman Estates, Illinois-based company lost $402 million, or $3.79 a share, for the period ended May 3. That compares with a loss of $279 million, or $2.63 a share, a year ago.

Excluding certain items, it lost $2.24 a share.

Revenue fell 7 percent to $7.88 billion partly because there were fewer Kmart and Sears stores open. The results also accounted for weaker Sears Canada revenue and the spinoff of Lands' End in April. Sears said last week that it is considering selling its Canadian operations.

Sales at domestic Sears stores open at least a year edged up 0.2 percent in the quarter. Excluding the impact of consumer electronics, the figure rose 0.8 percent. At Kmart stores open at least a year, sales declined 2.2 percent. Stripping out the impact of the consumer electronics business and its grocery and household goods category, the metric slipped 0.4 percent at Kmart.

Sales at stores open at least a year is a key indicator of a retailer's health. It excludes results from stores recently opened or closed.

One bright spot was online sales, which increased 26 percent.

Lampert 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, including Walmart Stores (WMT) and Home Depot (HD).

Sears caters to low to middle income shoppers, and is wrestling with a slow economic recovery that hasn't benefited all Americans equally. Many of its customers are juggling stagnant wages with higher costs of living like health care and food.

Sears has closed about 80 stores year to date and said it may close more during the rest of the year.

The company's stock fell $2.66, or 7.3 percent, to $33.90 in early premarket trading more than three hours before the market open.


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garkeller

Customer service in general has declined across the board...not just Sears...go into ANY store and give it a try...people have become so embossed into "social networking" that we forget how to communicate with each other face to face (unless drunk in a bar/nightclub)...cut down the forests, build more section 8 developments, use bath salts as drugs, melt the icecaps and die crashing from texting...Welcome to Planet Stupid!

May 23 2014 at 7:04 AM Report abuse rate up rate down Reply
ladkraemer

Sears was once the # 1 catalog store, you could buy a house from them. Like all Americans and American stick in the mud Companies they won't look to the future and thing by staying in the past they will survive. It would have been so easy to transfer their catalog over to the internet and they would have been thew Amazon instead of Amazon, but instead they killed that business, like did Montgomery wards, JC Penny etc. American Companies don't want to be in the Forefront of anybody like the the population of our country. What happened to us? Kodak files bankruptcy and they invented the digital camera; Xerox invented the Xerox copier, they are close to going out of business. Ford, GM, Chrysler Now Fiat, these were all great businesses until the bankers, accounts got a hold of them and innovation, Ideas, taking chances killed our businesses.

May 22 2014 at 6:14 PM Report abuse rate up rate down Reply
gpitt334508

They stoe money from me with the credit card I used Sears Credit Card I had proof and never got my money back never would I ever go back I am scared of credit cards better check every one you use seems all companies are scammers i use American Express and Love that Company they are tops with me never a bad report about American Express

May 22 2014 at 5:59 PM Report abuse rate up rate down Reply
1 reply to gpitt334508's comment
dopey.obamite

punctuation is our friend.

May 22 2014 at 9:52 PM Report abuse rate up rate down Reply
kimcrdr

I used to love sears then they merged with Kmart, I don't step foot in either store now!!

May 22 2014 at 5:50 PM Report abuse rate up rate down Reply
Scotty

Sears.....just another American store sold to the highest bidder in some other country. I wouldn't walk into their store.

May 22 2014 at 5:45 PM Report abuse rate up rate down Reply
brogers15

The 'Craftsman' line has been going downhill for some time. You can now buy a superior tool box at Harbor Freight (I know, I got one) that is LESS money than Sears, and BETTER QUALITY. (and yes, I realize that a lot of HF stuff is Chinese Cr$# as is much of Sears' stuff)

The LAST time I went into Sears (and I do mean the LAST!), 2 of their employees in the tool department were talking to each other about NON-store/work related fulff, and seemed to be pretty irked that I had 'interupted' them. My son and I were working on a time-sensitive project and in dire need of a tool, with price being of minimal concern on that day. I asked them if they might carry the tool, to which they told me to go look a couple of asiles over. I told them that we HAD looked over there and couldn't find what we needed. Their 'helpful' response was then, "Well, I guess we don't carry it then...." Now I was PISSED-OFF and asked them if they were aware that Sears was on the verge of CLOSING due to non-profitability and that their actions were CONTRIBUTING to the store's declining reputation and losses? They gave me the "Go away so we can get back to our conversation look," and to this day, neither my son nor myself have set foot in a Sears again. GONE are the days of my father's Sears, when it was "Satisfaction or your money back," and their service was 2nd to none. Will miss the Sears that once was, but then imo, they 'disappeared' some time ago... Sad....

May 22 2014 at 5:36 PM Report abuse rate up rate down Reply
rustygunz88

The main reason I went to Sears in recent years was for Craftsman handtools, Of which I own several thousand dollars worth. Now that they are no longer US-made, I have little reason to visit the store at all.

May 22 2014 at 5:26 PM Report abuse rate up rate down Reply
filiadoro3

There was a time when I bought all "die hard", & Sears tools...they cost more, but they lasted.The last time I bought a battery, they wanted a service charge to put it in. I asked where the sign stating there was a service charge, & was told it wasn't necessary to post. It was only $2.00, but I felt if it wasn't posted, I shouldn't have to pay. I wrote, complained, & never got an answer. That was the last time I purchased anything at Sears. It cost me $2.00, but it cost Sears more. No wonder they keep losing business! Jerry R.

May 22 2014 at 5:22 PM Report abuse rate up rate down Reply
darkfree

People do not want to pay full retail any longer and Sears is above full retail even when having a sale. There purchasing department does not make the best choices on alot of there items .

May 22 2014 at 5:20 PM Report abuse rate up rate down Reply
Jim Peterson

Wanna relive the 70's go into a Sears or Kmart!

May 22 2014 at 4:39 PM Report abuse rate up rate down Reply