Sears loses more money, will close more stores
Sears continues to struggle to bring its business to profitability with comps falling again, this time 11.9% in the first quarter.
The company also announced another round of store closures in the fiscal report for the quarter ended May 5.
Sears reported a net loss of $424 million, or $3.93 per share. That compares with a year ago, when Sears reported net income of $245 million, or $2.29 per share, helped by a $492 million gain from the sale of its Craftsman tool brand.
Revenue dropped more than 30 percent to $2.9 billion from $4.2 billion this time last year. Sears said recent store closures contributed to roughly two-thirds of the decline.
The same-store sales figure consisted of a 9.5 percent drop at Kmart stores and a 13.4 percent decline at Sears stores.
"In a challenging quarter, we continued to focus on our strategic transformation, identifying additional opportunities to streamline operations and adjust inventory and operating expenses while staying focused on our Best Members, Best Categories and Best Stores," said Edward S. Lampert, Chairman and Chief Executive Officer of Holdings. "Our Shop Your Way membership program and Integrated Retail Strategy are our key priorities, and we continue to look for new ways to leverage our Shop Your Way ecosystem to drive improvements in value for our members and to increase the frequency and amount of their engagement."
The retailer is currently evaluating an offer from Lampert's hedge fund, ESL Investments, where the company would sell certain assets — including the Kenmore brand.
"As we look to the remainder of 2018 and beyond, we remain committed to restoring positive Adjusted EBITDA and will continue to explore opportunities to unlock the full potential of our assets for our shareholders. This includes exploring third-party partnerships involving several of our businesses - such as Sears Home Services, Innovel, Kenmore and DieHard - and gaining further momentum around our new smaller store formats that blend brick and mortar and online experiences. We believe these initiatives, among others, will help us to strengthen the Company and better position it for the future."
The company will close approximately 100 "non-profitable stores," 72 of which will begin store closing sales in the near future.