Wall Street Journal
By Matt Jarzemsky
Sears Holdings Corp. swung to a loss for its fiscal first quarter on continued weak sales.
"Unfavorable weather, economic pressures facing our customers, and comparisons to last year's government-sponsored stimulus program relating to the purchase of appliances," hurt the latest results, President and Chief Executive Lou D'Ambrosio said in a prepared statement.
The department-store operator has suffered with lower same-store sales at its namesake stores, though its Kmart chain has generally performed better. Its earnings have slumped amid reduced revenue in recent quarters. Sears recently forecast a big loss for the latest period.
Sears reported a loss of $170 million, or $1.58 a share, for the quarter ended April 30. A year earlier, it posted a profit of $16 million, or 14 cents a share. Excluding items such as mark-to-market losses and domestic pension expenses, the company posted a loss of $1.39, compared with a year-earlier profit of 16 cents. Sears had predicted a loss of $1.35 to $1.81 a share for the latest quarter.
Revenue fell 3.4% to $9.71 billion.
Gross margin slid to 26.8% from 28.2% amid the introduction of instant free delivery at the Sears in the U.S. and increased markdowns at Sears Canada. Merchandise inventories were $9.9 billion at the end of the quarter, up from $9.3 billion.
The company said earlier this month domestic same-store sales fell 3.6% overall, including declines of 5.2% at Sears and 1.6% at Kmart.
