But revenue at stores open at least a year at its Sears stores has risen 0.5 percent so far this quarter. That would mark the first quarterly increase since the first quarter of 2010, when a federal cash-for-appliance program started, boosting sales.
The retailer is also on track to have its clothing business post its sixth straight quarter of increases in revenue at stores opened at least a year. Meanwhile, both Kmart and Sears' domestic online sales are up 20 percent. That's been helped by such programs as allowing shoppers to buy online and then pick up at the store.
Revenue at stores open at least a year is a key metric for retailers because it excludes revenue at stores that recently opened or closed.
Sears also gave an update on its fiscal fourth-quarter earnings. It said it expected a loss between $2.64 and $3.40 per share for the quarter ending Feb. 2. Excluding one-time items, it forecasts a profit of between $1.25 and $2 per share. The company is expected to report final fourth-quarter and full-year results on Feb. 28.
"The bottom line imperative for (Sears) is that it needs to stabilize traffic in the domestic operations if it will remain viable for the duration," Greg Melich, an analyst at the International Strategy & Investment Group LLC, said in a report released Tuesday.
Balter said uncertainty at rival J.C. Penney highlights another big problem: Sears could lose whichever direction Penney goes. Since Penney started a new pricing plan on Feb. 1 that eliminates hundreds of sales events in favor of everyday lower prices, the company has seen sales fall dramatically. Balter reasons that if Penney returns to discounting, it may take back some lost market share at lower prices, hurting Sears' clothing sales. He believes a bigger problem for Sears would be further deterioration of the Penney franchise. If Penney starts closing locations, that could undermine the value of Sears' real estate holdings, he wrote.
Brian Sozzi, chief equities analyst at NBG Productions, wonders whether Lampert will now just focus on selling off more assets instead of fixing the business.
"Will any of the signs of life at (Sears) continue to be nurtured?" he asked.
But Chris Brathwaite, spokesman at Sears, emphatically said Lampert will focus not just on the financial performance but on the customer experience. Improving stores is just as important as generating cash, he noted.
D'Ambrosio noted that Lampert has "been ahead of the curve in understanding the role of information and technology," and the company has appropriately invested in those areas.
Sears operates more than 2,600 stores in the U.S. and Canada.
Shares of the company fell $2.76, or more than 6 percent, to $40.16 in trading Tuesday. In the past 12 months, shares have risen nearly 50 percent.