Sears Hometown And Outlet Stores Post Positive Q3 Results
Monday December 3rd, 2012 - 11:08AM
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Although a lot of bad news has lately emerged from Sears Holdings, Inc., some good news has come out as well, perhaps nothing brighter than the latest results at the recently spun-off Hometown and Outlet Stores, Inc. That division posted net income attributable to stockholders up 29% to $8.8 million, or earnings of 38 cents per diluted share, in the third quarter versus $6.8 million, or 29 cents per diluted share, in the prior-year period.
Sears Holdings added that comparable store sales gained 3.1% over the prior-year period. Net sales increased 3.3%, to $556.9 million year over year. And operating income increased 27% to $14.1 million versus the 2011 period.
Bruce Johnson, CEO and president Hometown and Outlet Stores, said, "In the third quarter, we completed our separation from Sears Holdings Corp. added nine net stores and delivered improved year-on-year operating results. Comparable store sales increased by 3.1%. The company saw double-digit percentage increases in total sales of appliances, mattresses and apparel. Multi-channel sales, online, store-to-home, web-to-store and mobile, increased by 28%. Sales of power lawn and garden, and consumer electronics declined. The decline of more than 30% in consumer electronics sales is consistent with our strategy to de-emphasize this low-margin business in favor of the aforementioned categories. We are pleased with the year-on-year improvements in adjusted EBITDA and net income, and with our strong cash generation, in what is typically our seasonally softest quarter.”
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Dissecting what Ron Johnson got wrong during his brief, calamitous term at the helm of J.C. Penney is sure to be the focal point of retail strategy and tactics lessons for years to come. But Penney’s future could still hinge to some extent on what he got right.