Promo season took wind out of SHOS's sails in Q2

Sears Hometown and Outlet Stores reported a 2.8% drop in revenue during the second quarter of 2014, sluggish results that president and CEO Bruce Johnson attributed to a highly promotional sales environment among competitors.

"During the second quarter we observed a highly promotional environment for large appliances," said Johnson. "We chose to not fully follow the promotional activities of other retailers. This had an impact on our top line, and we are disappointed with our comparable store sales decline, but our gross margin dollars were similar to the year-earlier quarter."

Though sales on the whole suffered, SHOS saw considerable progress in its e-commerce revenues, which grew 21.5% to $38.3 million for the quarter.

Specifically, net sales were down by $18.2 million to a total of $638.7 million, compared to the second quarter of last year.

Net income came in at $3.4 million, down from $9.1 million in 2013.

Operating income also decreased, down 62.4% to $5.8 million. Comparable store sales were negative 6.3%.

"As we communicated after the first quarter, our Outlet segment inventory-sourcing activities have continued to improve, which affords us more pricing flexibility to offer great value to our customers," added Johnson. "With the improvement in sourcing initiatives and more 'as-is' merchandise, our goal is to drive demonstrably better Outlet sales and gross margin dollars in the second half of the year."