Dec. 03--The parent of struggling retailers Sears and Kmart reported third-quarter 2015 results Thursday that showed it narrowing its losses despite a nearly 20 percent drop in sales.
By the numbers: Sears' loss narrowed to $454 million from $548 million a year ago. The Hoffman Estates-based company lost $4.26 per share, compared with $5.15 per share. At the same time, sales continued their downward slide, dropping more than 19 percent to $5.7 billion from $7.2 billion at the same time last year. Sears' third-quarter sales just beat Wall Street's bet of $5.5 billion.
The "why": For years, Sears has been trying to stem the bleeding, aiming to reinvent itself from a traditional store-based retailer to one that's more membership based. Its membership loyalty program, Shop Your Way, accounts for roughly 75 percent of sales, the company said. Sears is also focused on capitalizing on its vast real estate holdings, selling off some properties and leasing others to generate more cash.
But in its stores, sales continue to decline in many categories, including apparel and consumer electronics. Sales in stores open at least a year declined 8.6 percent in the third quarter -- which accounted for $417 million of the company's revenue decline. At Sears, sales in stores open at least a year fell 9.6 percent while at Kmart they fell 7.5 percent. On the other hand, the company said home appliances, which Sears is known for, and mattresses sold well during the quarter.
As the company works to turn its business around, it generated $2.7 billion in cash through a rights offering and sale-leaseback transaction with Seritage Growth Properties. Sears created Seritage to extract more revenue from its properties.
Quote you on that: Sears CEO Edward Lampert, a hedge fund billionaire who owns the bulk of the retailer's shares, said in a statement that he recognizes that "a lot of work remains," noting that he brought in new leaders such as former Gymboree executive Joelle Maher, named Sears president in July, to drive the business forward. "As we head into the fourth quarter, we intensified our focus on our product offerings and promotions in order to enhance member engagement and provide our members with the best experience possible throughout the holiday shopping season," he said.
crshropshire@tribpub.com
