Sears falls short of its own recovery goals in Q3
Sears Holdings Corporation reported another quarterly loss in the third quarter, raising doubts over its chances of returning to profitability.
Still, Sears executives reaffirmed their commitment to boosting the company's growth potential, even if it means selling off even more stores in the new year.
"We remain fully committed to restoring profitability to our company and are taking actions such as reducing unprofitable stores, reducing space in stores we continue to operate (including through the Seritage lease arrangement), reducing investments in underperforming categories and improving gross margin performance and managing expenses relative to sales in key categories," said chairman and CEO Edward Lampert.
"While many observers have acknowledged the significant asset base of our company, we understand the concerns related to our operating performance and are committed to transforming our company through our Shop Your Way membership program and our Integrated Retail investments," he added. "At the same time, we will continue to explore options to recognize the inherent asset value in a manner that complements our transformation."
Net revenues for the third quarter ended Oct. 29 were down to $5.0 billion, compared to $5.8 billion in the year-ago quarter.
The decline was primarily driven by a decreased amount of Kmart and Sears Full-line stores in operation, which accounted for $323 million of the decline, as well as a 7.4% decline in comparable store sales during the quarter.
Comparable store sales decreased 4.4% for Kmart, mostly in the grocery & household, consumer electronics and pharmacy categories. However, comparable store sales increases occurred in apparel, jewelry and outdoor living. Sears Domestic comparable store sales decreased 10.0% during the third quarter of 2016, primarily driven by decreases in the home appliances, apparel and consumer electronics categories.
Net loss for the quarter came in at $748 million, down from a net loss of $454 million in the year-ago period.
"We will continue to take actions to generate liquidity, adjust our overall capital structure, and manage our business while meeting all of our financial obligations," said CFO Jason Hollar. "Actions may include additional expense reductions, financing transactions and asset monetization including exploring alternatives for our Kenmore, Craftsman and DieHard brands, our Sears Home Services business and our real estate portfolio."