Sears swings to a first-quarter loss
Hoffman Estates, Ill.-based Sears Holdings swung to a net loss of $56 million in the first quarter, compared with net earnings of $223 million in the first quarter last year.
Sales for the quarter fell 5.3 percent to $11.07 billion from $11.7 billion in the same period last year.
The company attributed the loss to lower gross margin rates at Kmart and Sears stores in the United States -- a decline that reflected increased promotions and markdowns to clear merchandise, the company said. Additionally, the retailer saw selling and administrative expenses increase by $99 million compared with the same period last year, and the company also recorded a charge of $32 million related to the sale of assets.
Sears Domestic saw the biggest same-store sales decline, down 9.8 percent in the first quarter. Same-store sales fell 7.1 percent at Kmart stores.
“Our comparable-store sales declined for the quarter across most major categories at both Kmart and Sears Domestic, most notably within the home appliance, lawn and garden and apparel categories,” the company said.
Sears’ interim CEO W. Bruce Johnson said the results reflected “the difficult economic environment and intense competition for consumer business.”
“At the same time we are managing costs, we will continue to invest in our future by hiring talented leaders and improving our online and multichannel capabilities,” Johnson said.
Sears Holdings currently operates approximately 3,900 full-line and specialty retail stores in the United States and Canada.