Sears Reports $94M Q2 Loss
By Alan Wolf -- TWICE, 8/24/2009
Hoffman Estates, Ill. — Slumping sales and higher costs from store closings and pension obligations led to a second-quarter loss of $94 million for Sears Holdings, compared with a year-ago profit of $65 million
“The overall retail market remains difficult and its impact is reflected in our results,” interim CEO and president W. Bruce Johnson said in a statement.
Net sales fell more than 10 percent to $10.6 billion for the three months, ended Aug. 1, and comp-store sales declined 8.6 percent in the United States.
At Sears' flagship stores, net sales declined 10 percent to $5.7 billion and comp-store sales fell 12.5 percent amid weak demand for major appliances and other home-related categories impacted by the depressed housing market.
At Kmart, net sales slipped 6.2 percent to $3.8 billion and comps declined nearly 4 percent, partially offset by an increase in consumer electronics sales.
Earnings were also dragged down by $103 million in expenses. These included a $61 million charge for closing 28 stores during the quarter (mostly Kmart's), plus associated severance pay, and $42 million in pension plan expenses stemming from last year's severe stock market declines.
Limiting the loss was a $212 million reduction in selling and administrative expenses and a $300 million reduction in inventory levels year-over year, to $8.6 billion.
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