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Sears Reports Deeper Loss; CE Sales Lower

8/18/2011 09:56:32 AM Eastern
Hoffman Estates, Ill. - Sears Holdings reported a deeper loss for its fiscal second quarter with lower CE being blamed for decreases in comp-store sales.

The net loss was $146 million, which was deeper than the $39 million loss in the prior year's second quarter. Revenues were $10.3 billion, down slightly from the prior year's $10.5 billion.

Sears Domestic comp-store sales declined 1.2 percent, which would have been flat if CE sales didn't go down, the company reported. While Kmart's comp-store sales received a boost from its appliance business, CE, among other categories, was a drag on that chain's volume also.

Sears Holdings said that beginning with the first quarter of 2011, it includes in comp-stores sales online sales from Sears.com and Kmart.com shipped directly to customers. These online sales increased 32 percent over last year.

The operating loss for Kmart during the second quarter was $16 million, compared with a profit of $19 million in the prior year. The Sears Domestic loss for the quarter was up $98 million, to $163 million, in the quarter.

Sales for Kmart were $3.62 billion in the quarter, down slightly from the prior year's $3.63 billion. At Sears Domestic, sales were $5.53 billion, down from $5.67 million in the prior year's second quarter.

During the quarter, Sears Holdings closed 29 stores, which consisted of 10 Kmart stores, three full-line stores, 12 Hardware and Appliance stores, two Sears Auto Centers and two The Great Indoors stores. It converted 14 Sears Grand stores to Kmart stores; closed seven product repair center locations; and, in addition to position reductions from the above actions, reduced approximately 250 existing support positions.
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