Hoffman Estates, Ill. -- Sears Holdings Corp. on Thursday reported a bigger-than-expected loss in its second quarter – the retailer’s ninth consecutive quarterly loss – amid weak sales. The retailer also announced it may close additional stores on top of the 130 closures already underway this year.
Sears also said Thursday the company plans to explore options with lenders to achieve more long-term capital-structure flexibility in the coming six to 12 months.
Sears lost $573 million during the quarter ended Aug. 2, compared to a loss of $194 million in the year-ago period.
Revenue slid 10% to $8 billion, due in part to its spinoff of the Lands’ End business.
Same-store sales fell 0.8%, comprised of a 1.7% drop at Kmart stores and offset by a .1% increase at Sears stores.
Sears said it will continue to explore a sale of its majority stake in Sears Canada, which reported its ninth loss in 14 quarters.
Sears chairman and CEO Eddie Lampert noted that the company is showing continued to show progress in its turnaround, pointing to its year-over-year increase in online and multi-channel sales, and with members of its Shop Your Way reward program now accounting for 73% of eligible sales.
“However, our second quarter earnings are unacceptable and we are taking steps to address our performance on several levels,” Lampert stated. “This includes reducing costs as we evolve our business model, investing in our Shop Your Way and Integrated Retail customer initiatives, rationalizing our physical footprint and improving pricing and promotions”
Lampert added that as the chain progresses with its transformation by investing in new programs and platforms, it continues to shoulder the costs of two promotional models, which adversely impacts margins.
There is more work to be done to get results where we expect them to be. Like any transformation, we must first overcome the burden of the initial costs before we can enjoy the benefits.
“Like any transformation, we must first overcome the burden of the initial costs before we can enjoy the benefits," Lampert said.