Sears Holdings clocks a loss in 2Q
HTT Staff -- Home Textiles Today, 8/18/2011 2:52:39 PM
Hoffman Estates, Ill. - With a $146 million net loss, or $1.37 loss per diluted share, compounded with flat to down comps at Kmart, Sears and Sears Canada, parent company Sears Holdings Corporation said it was dissatisfied with its second quarter results.
In response, ceo and president Lou D'Ambrosio said Sears Holdings is "taking actions to turn around our performance in a challenging economic environment. While we improved our revenue trend, including growing our online business by over 30%, we had lower gross margins. The margin decline was due to markdowns taken to clear seasonal inventory and promotional activity. Inventory was tightly managed, as we finished the quarter with domestic inventory $75 million lower than prior year compared to the first quarter when inventory was $416 million higher than prior year."
Other recent efforts to boost business, he noted: "We implemented targeted expense actions, continued to invest in the business to serve our customers, and welcomed talented new leaders to the team, including Rob Schriesheim as cfo, Edgar Huber to lead Lands' End and Monica Woo as head of Sears marketing."
Total revenues in the quarter fell 1.9% to $10.3 billion, with consolidated U.S. comp down 0.7% and a 5.8% decline in comparable store sales at Sears Canada.
The U.S. trend improved over the first quarter's 3.6% decline and included a decrease at Sears Domestic of 1.2%, while sales at Kmart were flat.
Online sales increased 32% over last year. As of this year's first quarter, Sears Holdings has been including in its comparable stores sales the online sales from sears.com and kmart.com shipped directly to customers. This change resulted in a positive benefit of approximately 60 basis points to U.S. comps for the second quarter.
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