Sears Reduces Losses; CE Sales SinkHoffman Estates, Ill. – Sears staunched its sales and earnings free fall last year, although CE weighed heavily on its results. 2/28/2013 04:27:00 AM Eastern
Hoffman Estates, Ill. – Sears staunched its sales and earnings free fall last year, although CE weighed heavily on its results.
Net loss for the fourth quarter ended Feb. 2 was $489 million, compared to a year-ago loss of $2.4 billion, and net loss for the full fiscal year was $626 million, compared to $3.1 billion in 2011.
Sales declines also eased, slipping just 1.6 percent to $12.3 billion for the quarter, due in part to an extra sales week in the reporting period.
But any gains were offset by steep declines in the company’s CE business: total U.S. comp store sales slipped 1.6 percent during the quarter, but were essentially flat (down 0.2 percent) excluding electronics.
The category’s impact was most pronounced at Sears, where comps edged up 0.8 percent with CE, and rose 2.4 percent without it on strength in major appliances. At Kmart, total comps fell 3.7 percent and declined 2.5 percent excluding electronics, which experienced a “significant” decrease, the company said.
For the full year, total U.S. comps slipped 2.5 percent with CE, and 1.4 percent without it. Broken out by chain, comps declined 1.4 percent at Sears including CE and were flat (down 0.1 percent) without it, while Kmart comps declined 3.7 percent including the category, and 2.8 percent without it.
Sales and earnings were also impacted by the spinoff of its Hometown and Outlet Store businesses and the closure of additional Kmart and Sears locations.
In a statement, chairman/CEO Edward Lampert said “Sears Holdings made progress in 2012 improving the profitability of our business, but we know there’s more work to be done in 2013. Our focus continues to be on our core customers … and finding ways to provide them value and convenience through integrated retail and our Shop Your Way membership platform.”
The company noted that more than half of Sears’ and Kmart’s U.S. revenue for the quarter and the year were driven by the loyalty program.
In his annual open letter to shareholders, employees and customers, he noted that the company has made significant investments in its online e-commerce platforms, its membership rewards program and the technology to support them, including:
* rolling out tablets and mobile devices to Sears sales associates that can provide more detailed product information to customers and mobile checkout;
* broadening the online assortment to more than 60 million items available through Sears.com, its third-party marketplace and its mobile platforms, and;
* a new return/exchange policy that lets customers complete a form online and drop off or exchange an item at a store within 5 minutes or less.
Looking ahead, the company expects to generate at least $500 million by selling off additional assets and another $300 million by reducing inventory as a result of stores already or expected to be closed and productivity improvements.