Sears posts $170 million loss on weak sales
Hoffman Estates, Ill. — Sears Holding Corp. reported Thursday that it recorded a bigger-than-expected loss in the first quarter as its shoppers cut back on spending. The chain said it lost $170 million, compared with net income of $16 million in the year-ago period.
The retailer had cautioned earlier in May that it expected a first-quarter loss due mainly to a drop in appliance, clothing and consumer electronic sales.
Kmart, which had been a strong performer for the company, saw sales drop 1.6% in the quarter on lower food, consumables and pharmacy revenue. At Sears’ domestic stores, sales dropped 5.2% on weakened sales of appliances, clothing and consumer electronics.
Consolidated same-store sales declined 3.6%. Overall revenue fell 3% to $9.71 billion, missing Wall Street’s anticipated $9.73 billion, in part because of the weak results from its domestic stores, as well as having fewer Kmart and Sears stores open. The company also reported a 9.2% drop in same-store revenue from Sears stores in Canada.
President and CEO Lou D’Ambrosio, who took the helm in February, said that bad weather, economic pressures and the absence of the appliance rebate program hurt Sears’ performance. But he also admitted that the company could have done a better job internally.
"We cannot control the weather or economy or government spending. But we can control how we execute and leverage the potent set of assets we have," D’Ambrosio said.
Sears Holdings meets low expectations in Q1
HOFFMAN ESTATES, Ill. —Sears Holdings reported a first-quarter net loss of$170 million, or $1.58 per diluted share, in line with the company’s expectations for a net loss in the range of $145 million and $195 million, or between $1.35 and $1.81 per diluted share. The company reportednet income of $16 million, or 14 cents per diluted share, in 2010.
The company reported that total revenues decreased $341 million to $9.7 billion for the quarter, as compared with total revenues of $10.0 billion for the same period last year. The decline in total revenue for the quarter was primarily a result of a 3.6% decrease in domestic comparable-store sales and the effect of having fewer Kmart and Sears full-line stores in operation, in addition to a 9.2% decline in comparable-store sales at Sears Canada, partially offset by an increase of $54 million due to changes in the Canadian foreign exchange rate.
The domestic comparable-store sales results included a decrease at Sears domestic of 5.2% and Kmart of 1.6%. Decreases in sales for the quarter at Sears domestic were primarily driven by the appliance, apparel and consumer electronics categories, partially offset by increases in the home, sporting goods, jewelry and footwear categories. Appliances experienced a low double-digit decline and benefited in the prior year from the cash for appliances rebate programs.
Apparel experienced slow spring/summer sales due in part to worse weather than the prior year. The Kmart quarterly decrease in comparable-store sales was primarily driven by decreases in the food and consumables and pharmacy categories.
"Our first quarter was adversely impacted by unfavorable weather, economic pressures facing our customers, and comparisons to last year’s government-sponsored stimulus program relating to the purchase of appliances. However, we also fell short on executing with excellence. We cannot control the weather or economy or government spending. But we can control how we execute and leverage the potent set of assets we have," said Lou D’Ambrosio, Sears Holdings’ CEO and president.
Trade in that old tablet for an Amazon gift card
SEATTLE — Amazon.com has launched an electronics trade-in service that allows customers to exchange their used electronics for Amazon.com gift cards. According to Amazon.com, customers can trade in multiple items, including video games, tablets and cell phones, at the same time by sending in one box.
Customers can visit http://www.amazon.com/tradein and start searching for items to trade in. If the product is listed as eligible for trade-in, then customers can click the trade-In button to add items to their trade-in shipment. Amazon’s trade-In program offers a variety of condition types including “like new,” “good” and “acceptable,” giving customers an easy way to view multiple trade-in values. Once customers have added all the items they would like to trade in to their trade-in shipment, they can print a pre-paid shipping label and ship everything for free. After the product is received and inspected, an Amazon.com gift card will be deposited into the customer’s Amazon.com account, generally in less than 48 hours.
“Technology is constantly evolving and newer, better versions of consumer electronics are introduced all the time,” says Paul Ryder, VP electronics for Amazon.com. “We want to give customers the opportunity to get great value from their used electronics. Hundreds of thousands of customers have already received millions of dollars in gift cards from the other products in our program. The Electronics category is a natural extension and we are delighted to offer our customers more trade-in options.”