Sears Holdings Loss Hits $421 Million in Q3
HOFFMAN ESTATES, Ill.-Weak sales and margins led Sears Holdings to almost double its net loss in the third quarter at $421 million.
Both Sears and Kmart stores, along with Sears Canada, reported declines in sales in the quarter, which ended on Oct. 29. On a same-store basis, Kmart's sales fell off 0.9 percent, Sears U.S. stores were down 0.7 percent and Sears Canada Stores plummeted 7.8 percent. Net sales for the corporation as a whole totaled $9.6 billion, down 1.2 percent from last year's third quarter.
A Sears Holdings statement observed that increased markdowns in apparel and home at Kmart hurt the chain's gross margin, while Sears stores reported reduced margins in home appliances and consumer electronics. Partly as a result, gross margin for the company as a whole declined 80 basis points to 25.6 percent. Selling, general and administrative expenses rose 1.7 percent in dollars and 80 basis points as a percentage of sales, to 28 percent.
Although he said Sears Holdings is "not satisfied with our performance," Lou D'Ambrosio, president and CEO, said Sears stores saw improvement in apparel sales, and that online sales rose 20 percent in the quarter. D'Ambrosio also said the company continues to invest in improving the shopping experience in its stores, particularly in the technology area of what he called "integrated retail. We believe it is becoming more and more obvious that the future of retail will revolve around the seamless integration of online and offline experiences," he said.