Sears Earnings: Sales Miss Expectations as Consumer Spending Remains Tight
The owner of the Kmart chain said its second-quarter net loss shrank to $39 million, or 35 cents a share, from $94 million, or 79 cents a share, in the year-earlier quarter. The company reported an adjusted net loss of 19 cents a share, compared to 17 cents a share in the year-ago period. Analysts had expected a loss of 17 cents a share.
Sales decreased by $93 million to $10.46 billion from $10.55 billion. That missed the analysts' average estimate of $10.6 billion, according to Thomson Reuters I/B/E/S. The decline in total revenue fwas primarily a result of a 2.2% decrease in domestic comparable store sales -- 1.4% decline at Kmart and 2.8% at Sears domestic -- and the effect of having fewer Kmart and Sears Full-line stores in operation, partially offset by an increase of $96 million due to changes in the Canadian foreign exchange rate, the company said.
"Kmart continued to improve its performance during the second quarter, as an improvement in its gross margin rate led to increased profitability," said interim CEO and president Bruce Johnson. "Overall, our total revenues declined only slightly despite the uncertain economic environment faced by our customers."
Sears had cash balances of $1.2 billion on July 31, 2010, $1.3 billion on August 1, 2009 and $1.7 billion on January 30, 2010. The retailer repurchased common shares at a total cost of $272 million during the quarter.