Sears Hometown And Outlet Stores Post Q4 Loss

For the fourth quarter, Sears Hometown and Outlet Stores, Inc., posted a net loss of $4.63 million, or 20 cents per diluted share, versus net income of $3.72 million, or 16 cents per diluted share, in the year-prior period. Net sales were $435.9 million versus $462.5 million in the quarter a year earlier as comparable store sales decreased 7.7%.

Operating loss was $9.7 million versus an operating income of $7.8 million in the year-prior quarter.

For the full fiscal year, ended January 31, net loss was $168.8 million, or $7.45 per diluted share, versus net income of $35.6 million, or $1.55 a diluted share, in the fiscal 2013 period. Net sales were $2.36 billion versus $2.42 billion in the prior year, as comps decreased 5.7%.

Operating loss was $171.2 million versus operating income of $61.1 million in the year prior, the company reported.

In announcing the financial results, Bruce Johnson, the retailer’s president and CEO, said, “Fourth quarter results were disappointing, especially in our Hometown segment where adjusted comparable store sales were down 8.3%. This segment continues to be adversely affected by the continuing highly promotional environment for major home appliances. Additionally, year-over-year comparisons were unfavorably impacted by our significant franchising activity in the fourth quarter of 2013. Initial franchise revenues were down $9.1 million in the fourth quarter of 2014 from $10.8 million in the fourth quarter of 2013. Also, based on recent events and the decline in the financial performance of some of our franchisees, we have recorded a non-cash, incremental $1.5 million provision for losses on franchisee receivables in the fourth quarter of 2014.”

Johnson added, “Looking ahead, we are taking steps to improve performance in 2015. In our Hometown segment, we are testing several initiatives that leverage our core strengths in home appliances by focusing on the top 10 appliance brands, boosting the selling skills of our associates, independent dealers and franchisees, providing our customers with enhanced service levels from product selection to delivery, and offering the lowest prices with our price match program. We anticipate continuing to make progress in our Outlet segment sourcing initiatives and operational efficiencies. We are also enhancing our online capabilities with improvements in online marketing and the user experience on searsoutlet.com.”