Wednesday, October 22nd13.6°C
23840
23778

Sears 4th-quarter loss narrows as company cuts expenses, reduces inventory

NEW YORK, N.Y. - Sears Holdings Corp. reported a hefty loss in the fourth-quarter on a 14 per cent sales drop, as the beleaguered retailer continues to struggle to bring shoppers into its stores.

But shares rose 5 per cent in midday trading as the operator of Kmart and Sears stores narrowed its loss versus a year ago. It is also seeing rare sales growth this month.

Sears' Chairman, CEO and hedge fund billionaire Eddie Lampert called it a "tough to terrible" holiday season for the company. It underscores his challenges to turn around the business.

Lampert combined Sears and Kmart in 2005, about two years after he helped bring Kmart out of bankruptcy. It faces mounting pressure from nimbler rivals like Wal-Mart Stores Inc. and Home Depot.

Sears is shifting away from its focus on running a store network into a member-focused business. Loyal shoppers receive incentives to buy. Its results have been hurt as it continues traditional promotions while investing in its membership program dubbed Shop Your Way.

Sears has also been cutting costs, reducing inventory and selling assets to return to profits. It plans to spin off its Lands' End clothing business as a separate company.

"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.

Sears noted that sales to Shop Your Way members accounted for 72 per cent of all business from Sears' full-scale stores and Kmart stores in the fourth quarter, up from 58 per cent a year ago.

But Gary Balter, an analyst at Credit Suisse, says that Sears needs to do more to invest in its outdated stores.

"We would expect that 2013 was the nadir, as it is hard to imagine that a retailer can lose that much money on the large sales base that Sears enjoys," he wrote.

Sears lost $358 million, or $3.37 per share, for the period ended Feb. 1 versus a loss of $489 million, or $4.61 per share, a year ago. Revenue dropped 14 per cent to $10.59 billion. The period had one less week in the latest quarter and fewer stores.

Sales at stores open at least a year declined 6.4 per cent. At Sears stores, the figure fell 7.8 per cent on softness in categories such as tools, consumer electronics and home appliances. It dropped 5.1 per cent at Kmart locations on weakness in consumer electronics, toys, drugstore, grocery and household items.

This metric is a key indicator of a retailer's health.

Total costs and expenses fell to $10.73 billion from $12.88 billion. Merchandise inventories fell to $7 billion from $7.6 billion.

For the year, Sears lost $1.37 billion, or $12.87 per share, versus a loss of $930 million, or $8.78 per share, a year ago. Annual revenue declined 9 per cent to $36.19 billion.

Shares rose $2.04, or 5.1 per cent, to $42.44 in midday trading. Its shares are down almost 10 per cent from a year ago.

The Canadian Press


Read more Business News

23658


Recent Trending




Today's Market
S&P TSX14584.33+36.62
S&P CDNX825.072.79
DJIA16612.82-1.99
Nasdaq4420.189+0.71
S&P 5001942.20+0.92
CDN Dollar0.8873-0.0036
Gold1245.90-5.7999
Oil82.54+0.58
Lumber329.70+0.10
Natural Gas3.678-0.033

 
Okanagan Companies
Pacific Safety0.11+0.01
Knighthawk0.01-0.005
QHR Technologies Inc1.16-0.01
Cantex0.055-0.025
Anavex Life Sciences0.192+0.001
Metalex Ventures0.05+0.005
Russel Metals33.32+0.23
Copper Mountain Mining2.17+0.18
Colorado Resources0.150.00
ReliaBrand Inc0.012+0.0009
Sunrise Resources Ltd0.060.00
Mission Ready Services0.455-0.005

 



23015

FEATURED Property
2088405588 Klassen Rd
5 bedrooms 3 baths
$439,000
more details
image2image2image2
Click here to feature your property
Please wait... loading


Keep it rubber side down

This time of year, I always worry about which friends of mine will get caught going off the road in adverse weather conditions. With a little preparation most accidents can be avoided. Having won the...


Big bank predicts rate hike

Photo: Thinkstock.comThe end of record-low rates is nigh, according to one major bank, which has taken a stance and predicted when the Bank of Canada will raise its long-standing overnight rate. &ldq...


Experts share strategies in Kelowna

The third week in October is “Small Business Week”, a week dedicated to supporting local, small businesses. The week was designed to bring awareness to Canadians about the role small busin...

_








Member of BC Press Council


22632