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Sears Posts Lower Profits, Flat Sales

5/20/2010 09:39:04 AM Eastern
Hoffman Estates, Ill. - Sears reported lower net income and flat sales for its fiscal first quarter ended May 1.

Net income for the quarter of $16 million compared with $26 million year on year. Revenues during the quarter were $10.1 billion, essentially flat with the prior year's opening quarter.

Comp store sales at Kmart were up 1.7 percent and 1.2 percent at Sears Domestic.

"Kmart registered a comparable store sales increase for the third consecutive quarter and Sears posted its first quarterly increase in several years as we effectively partnered with state agencies to sell energy-efficient appliances. Sears, however, also experienced lower margin rates during the quarter," said W. Bruce Johnson, Sears Holdings' interim CEO/president.

"On the other hand, our Kmart format performed very well during the quarter, achieving margin rate improvement on top of its increase in sales and nearly doubling its Adjusted EBITDA. Furthermore, we continued to increase our investment in our multi-channel capabilities and ShopYourWay rewards program, while at the same time reducing our expenses."

The domestic comparable store sales results included an increase at Kmart of 1.7 percent and an increase at Sears Domestic of 1.2 percent. Increases in sales for thequarter at Sears Domestic were primarily driven by the home appliance category, partially offset by declines in the tools and home electronics categories.
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