Sears swings to loss in Q1

Sears Holdings posted a net loss of $279 million in the first quarter, compared to earnings of $189 million in the same quarter last year. 

Revenue from merchandise sales and services declined 8.8% to $8.45 billion. 

"Our recent financial performance has not been acceptable, although we have seen some positive momentum as sales per member increased and our online business grew 20% in the quarter," said Eddie Lampert, Sears Holdings' Chairman and Chief Executive Officer. "During the quarter, we have accelerated our activity to transform Sears Holdings into a leading Integrated Retailer that fosters relationships with members through our SHOP YOUR WAY platform. We launched new mobile capabilities, like Member Assist, which allows our members to communicate directly with our consultative store sales staff remotely in a manner most convenient for our members. We believe that if we leverage technology to provide our members with the easiest, most seamless shopping experience possible, we will be successful."

Domestic comparable store sales declined 3.6% in the first quarter. Sears Canada’s comps declined 2.6% in the quarter. 

The comp-store decline at Sears Domestic of 2.4% predominately was driven by weather related declines in the lawn & garden category. Excluding lawn & garden, comparable store sales would have increased 0.3%. This slight increase was due to increases in the apparel and home categories, which were partially offset by declines in the consumer electronics and tools categories, the company reported.

Amid the bleak report, there was some good news on the digital front. The company said online business on sears.com and kmart.com increased 20% over the prior year first quarter.

Part of the reason for the total sales decline was the effect of having fewer Kmart and Sears Full line stores in operation, plus the separation of the Sears Hometown and Outlet businesses, which occurred in the third quarter of 2012.