Sears 4Q loss narrows as it lowers expenses
THE ASSOCIATED PRESS February 27, 2014 8:22AM
Sears’ fourth-quarter loss narrowed as the operator of Sears and Kmart stores lowered expenses and reduced inventory. | AP file photo
HOFFMAN ESTATES — Sears’ fourth-quarter loss narrowed as the operator of Sears and Kmart stores lowered expenses and reduced inventory.
Sears has been trying to restore profitability by cutting costs, trimming inventory, selling off some assets and spinning off others. Last December, the chain announced that it will spin off its Lands’ End clothing business as a separate company by distributing stock to the retailer’s shareholders.
Sears said Thursday that it lost $358 million, or $3.37 per share, for the period ended Feb. 1. That compares with a loss of $489 million, or $4.61 per share, a year ago.
Revenue for the Hoffman Estates company dropped 14 percent to $10.59 billion from $12.26 billion. The performance was hurt in part by one less week in the latest quarter and having fewer Sears and Kmart stores.
Sales at stores opened at least a year declined 6.4 percent. At Sears stores, the figure fell 7.8 percent because of softness in categories such as tools, consumer electronics and home appliances. It dropped 5.1 percent at Kmart locations due to weakness in consumer electronics, toys, drugstore, grocery and household items.
This figure is a key indicator of a retailer’s health because it excludes results from stores recently opened or closed.
Total costs and expenses fell to $10.73 billion from $12.88 billion. Merchandise inventories declined to $7 billion from $7.6 billion.
Sears Holdings Corp. is moving away from its focus on running a store network into a business that is members-focused, where its most loyal shoppers receive incentives to buy. The company’s Chairman and CEO Edward Lampert said in statement that full-year results were hampered during the transition as it continues to do traditional promotions while investing in its membership loyalty program called Shop Your Way.
“While transformations of this size are challenging, and our financial results do not currently reflect our progress in member engagement, we believe the changes we are making through Shop Your Way and integrated retail will benefit us in the changing retail landscape,” Lampert said.
For the full year, Sears lost $1.37 billion, or $12.87 per share. In the previous year it lost $930 million, or $8.78 per share.
Annual revenue declined 9 percent to $36.19 billion from $39.85 billion.
Sales at stores open at least a year fell 3.8 percent. At Sears stores the figure dropped 4.1 percent, while at Kmart it declined 3.6 percent.