By Ben Fox
Sears Holdings Corp. (NASDAQ:SHLD) reported a wider loss in its fiscal third quarter as revenue slumped due to weaker same-store sales and store closures.
Sears, controlled by billionaire hedge-fund investor Edward Lampert, has been working to shed assets and spin off businesses as it tries to turn around its mass-market retail stores. The company already closed more than 300 stores since 2010; last month it said it may spin off its Lands’ End brand, would consider strategic alternatives for its line of auto centers and is selling some store leases in Canada.
At the same time, Sears last month said that the third-quarter’s sales would again be lower than a year ago.
The retailer already used the spin-off tactic twice since the beginning of 2012. Sears handed its own shareholders the stock of California hardware-store chain Orchard Supply Hardware. Then later last year, Sears moved to spin off another hardware business, the Sears Hometown & Outlet Stores Inc.
Mr. Lampert said Thursday the company is pushing to transform its business into a member-centric one, using its Shop Your Way program. In the latest quarter, Shop Your Way members accounted for 70% of sales, up from 65% in the prior quarter.
Domestic same-store sales dropped 3.1%, with a 2.1% declined at Kmart and a 4% drop at Sears domestic stores. Kmart’s decline reflected weakness in grocery, household and drugstore sales, as well as consumer electronics and toys. Sears lower sales stemmed from decreases in most categories, the company said. Online and multi-channel sales were up 17% from a year ago.
For the quarter ended Nov. 2, Sears posted a loss of $534 million, or $5.03 a share, compared with a year-earlier loss of $498 million, or $4.70 a share. Adjusting for certain tax impacts and other items, the loss was $2.88 a share compared with a year-earlier loss of $2.07.
Revenue fell 6.6% to $8.27 billion due to fewer stores and lower domestic same-store sales.
Shares closed Wednesday at $61.70 and were inactive premarket. The stock is up 49% so far this year.