For the first quarter ended May 3, Sears Holdings Corp. posted a net loss attributable to Sears shareholders of $402 million, or $3.79 per diluted share, versus $279 million, or $2.63 per diluted share, in the year-earlier period. Net sales skidded to $7.88 billion from $8.45 billion in the 2013 quarter, the retailer stated.
Adjusted net loss per diluted share, excluding one-time charges, was $2.24 versus $1.36 in the year-prior period. Analysts polled by Thomson Reuters expected a loss of $1.87 per share on average.
Sears declared domestic division comparable store sales growth of 0.2%. Excluding the impact of consumer electronics, comparable store sales growth would have been 0.8%, the company reported.
Kmart comparable stores sales were down 2.2%.
Online and multi-channel sales grew 26% over the prior-year first quarter. Sears Holdings also completed the spin-off of Lands’ End, from which the company received gross proceeds of $500 million, the retailer maintained. Sears Holdings reported that it is also continuing to evaluate options to separate its Sears Auto Center business and announced the closure of approximately 80 stores in 2014. The company may close additional stores during the remainder of the year, it asserted.
Sears also reported that it continued with its “inventory productivity efforts,” with consolidated net inventory down approximately $620 million and domestic net inventory down approximately $510 million year-over-year, when excluding the impact of Lands’ End inventory.
“Sears is undergoing a significant transformation, and we fundamentally are changing the way we do business,” Edward Lampert, chairman/CEO Sears Holdings said in announcing the results. “Our performance in the first quarter highlights the challenges we are facing as well as the progress we are making in this transformation. We are moving away from a company that was heavily based on selling products solely through a store-based network to a member-centric business model focused on providing benefits to our members any time and any place. We are seeing progress in our transformation to a member-centric, integrated retailer, as we continue to invest heavily in driving our Shop Your Way program.”
Earlier this month, Sears announced that it is exploring strategic alternatives for its 51% interest in Sears Canada, valued at approximately $730 million as of May 20. Those include a potential sale of its interest or Sears Canada as a whole. Sears Holdings subsequently engaged BofA Merrill Lynch to assist the company in connection with those efforts.
Sears Canada’s first quarter revenue declined by $145 million year over year, driven by a 7.6% slide in comparable store sales, the company asserted, which accounted for approximately $45 million of the stumble. Another contributor was the effect of having fewer stores in operation, which accounted for approximately $25 million of the decline. Revenues also included a decrease of $59 million due to foreign currency exchange rates, Sears pointed out.