Sears' Profit Drops

-- Home Textiles Today, 5/24/2010 12:00:00 AM

Hoffman Estates, Ill. —

Gross margin pressure cut Sears Holdings' earnings per share by 38% to 14 cents per share during the first quarter.

Sears U.S. saw gross margin decline 110 basis points because of lower margins on home appliances and stepped up markdowns elsewhere, the company said.

Sales were essentially flat at $10 billion. Kmart comps were up 1.7%, and Sears U.S. comps rose 1.2%. Adjusted EBITDA (earnings before interest depreciation, taxes and amortization) was up 89% at Kmart, down 35% at Sears U.S. and up 4% at Sears Canada.