HOFFMAN ESTATES (dpa-AFX) - Retailer Sears Holdings Corp. (SHLD) reported Thursday wider net loss in its third quarter, hurt by weak revenues and comparable store sales.
Edward Lampert, Chairman and Chief Executive Officer, 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.'
For the third quarter, the company's net loss attributable to shareholders was $748 million or $6.99 loss per share, wider than last year's loss of $454 million or $4.26 loss per share.
Adjusted for significant items, attributable net loss was $333 million or $3.11 loss per share, compared to loss of $305 million or $2.86 loss per share a year earlier.
Adjusted EBITDA, a key earnings measure, was negative $375 million, compared to prior year's negative $332 million.
During the third quarter, gross profit decreased $300 million from last year to $962 million. Gross margin fell to 19.1 percent from last year's 21.9 percent, on lower sales and weak margin in both the Kmart and Sears Domestic segments. Gross margin performance was weak in the apparel business.
Revenues decreased to $5.03 billion for the quarter from revenues of $5.75 billion a year ago.
The company attributed the decline in revenues primarily to having fewer Kmart and Sears Full-line stores in operation, as well as a 7.4 percent decline in comparable store sales.
At Kmart, comparable store sales decreased 4.4 percent driven by declines in the grocery & household, consumer electronics and pharmacy categories. Meanwhile, comparable store sales increased in several other categories, including apparel, jewelry and outdoor living.
Sears Domestic comparable store sales decreased 10 percent, primarily driven by decreases in the home appliances, apparel and consumer electronics categories.
Regarding its earlier announced intention to explore alternatives for Kenmore, Craftsman and DieHard brands and Sears Home Services business, the company said it continues to evaluate opportunities for these businesses.
It was on May 26 that the company announced its plans to seek alternatives for these businesses by evaluating potential partnerships or other transactions that could expand distribution of brands and service offerings to realize significant growth.
The company said there can be no assurance that it will complete one or more transactions, and that it intends to take actions on its own that present the opportunity to improve the economics of these brands and business, including potential externalization through non-Sears Holdings channels.
Sears Holdings' shares gained 2.9 percent on Wednesday and settled at $12.12.
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