Sears sales slump during holiday season

Published on NewsOK Modified: January 9, 2014 at 6:00 pm •  Published: January 9, 2014
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NEW YORK (AP) — It was an ugly holiday season for Sears.

Sears Holdings Corp.'s shares plummeted in after-hours trading Thursday after the beleaguered retailer said it expects a hefty loss for the fourth quarter and full year as sales during the critical holiday season dropped sharply.

The retailer, which operates Sears and Kmart stores, said that it expects an adjusted loss between $213 million and $316 million, or $2.01 to $2.98 per share, for its fourth quarter. For the year, it forecast an adjusted loss between $811 million and $914 million, or $7.64 to $8.61 per share.

Two analysts surveyed by FactSet had expected a profit of 38 cents per share for the fourth quarter and a loss of $6.80 for the year, on average.

The retailer, based in Hoffman Estates, Ill., also said its Kmart and Sears chains combined had a 7.4 percent drop in revenue from stores open at least a year for the nine-week period ended Jan. 6. For Sears Canada, that figure was down 4.4 percent. This decline in a key measure, which strips away the impact of recently opened or closed stores, was sharper than in the third quarter.

The dismal results raise more questions about the retailer's future as it faces mounting pressures from other nimbler rivals like Wal-Mart that have lured shoppers away for years. It also underscores the heavy pressure that Eddie Lampert, hedge fund billionaire and Sears' chairman and CEO, faces to turn around the business. Lampert engineered the combination of Sears and Kmart in 2005, about two years after he helped bring Kmart out of bankruptcy.

To improve its business, Sears is shifting away from its focus on running a store network into a business that is members-focused, where its most loyal shoppers receive incentives to buy. The company once again blamed that transition for weighing on results as it continues to do traditional promotions while investing in its membership loyalty program called Shop Your Way. But it said it was confident it would work in the long run.

At the same, time, Sears has been trying to restore profitability by cutting costs, reducing inventory and selling off some assets and spinning off others. Last month, Sears announced it will spin off its Lands' End clothing business as a separate company by distributing stock to the retailer's shareholders.



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