Sears Posts Losses in Third Quarter, Shares Drop
November 18, 2012- Sears Holding Corp (SHLD), the department store group reported on Thursday its third quarter earnings. The company reported it had a net loss that increased from the third quarter of last year, as revenues dropped, which was a reflection of lower comparable store sales and fewer full-line stores. The bottom line for last year included a benefit for income tax.
After the figures were release, Sears’ shares dropped 6% on Nasdaq in trading after hours. Sears Holdings operated its namesake stores as well as Kmart stores. The company said revenues for the third quarter were down to $8.86 billion from over $9.41 billion during the same quarter a year ago.
Sears said that the decline in revenues was due to fewer Sears and Kmart stores in operation and comparable stores sales domestically were lower. Comparable stores, stores that have been open at least 12 months dropped 3.1% with 1.6% in Sears stores in the U.S. and 4.8% in Kmart stores.
Comparable stores for Canada’s Sears were down by 5.7%, which reflected the decline in sales in electronics, men’s and women’s apparel, home décor and snow throwers.
Lou D’Ambrosio, the CEO of Sears Holdings, said shortfalls were experienced however, in sections like Household and Grocery and Consumer Electronics and the company is undertaking actions to help improve their performance.
For the third quarter, gross margin dropped from last year’s 25.5% to 25.4%, while administrative and selling costs, as a percentage of overall revenues, rose from last year’s 28% to 28.2%.
The loss for the third quarter widened to over $498 million or about 4.70 a share from last year’s loss of only $2.55 a share in the third quarter. Last year, during the same period, the earnings results included one income tax benefit worth nearly $91 million. That was compared to this year’s $11 million income tax expense during the quarter.