Sears Hometown And Outlet Stores gets served a Q1 challenge
Sears Hometown and Outlet Stores didn't fare too well from a sales perspective in the first quarter, but the company managed to look on the bright side of its overall strategic progress.
"In the first quarter, we continued to make progress on the rollout of our America's Appliance Experts program and the transformation of our IT platform, which will better position the company for long-term success," said president and CEO Will Powell. "We experienced a challenging sales quarter, but saw improvements in several strategic growth categories and took steps in Outlet to be more competitive in the current highly promotional environment. In addition, actions taken in 2015 resulted in lower year-over-year expenses."
Sales for the first quarter ended April 30 decreased 7.9% to $537.0 million from the first quarter of 2015, driven primarily by the impact of closed stores and a 2.8% decrease in comparable store sales.
The company managed to pull into the black in terms of operating income, swinging from a loss of $5.1 million last year to positive income of $2.8 million.
A net loss of $3.6 million was not an improvement over last year's net income of $1.3 million, however.
Powell added that Hometown posted a comparable store sales decline of 2.6% owing to a decline in home appliances and lawn and garden, though mattresses and tools performed well.
Comparable store sales for Outlet were down 3.1%, mostly due to lower sales of home appliances.
"During the quarter, we initiated a highly competitive pricing test in a group of Outlet stores that resulted in a 640 basis points improvement in comparable store sales compared to stores on the existing promotional plan," said Powell. "Due to the success of the test, we plan to roll out our highly competitive pricing nationally in the second quarter of 2016."
The company converted another 78 Hometown stores to its America's Appliance Experts program, which outperforms non-AAE locations. Another 200 locations are slated to convert to AAE format in 2016.
Additionally, the furniture category delivered a 23.3% comparable store sales increase.