Sears’ Earnings Soured In Second Quarter

Cites declines in core home appliance business
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 Sears Holdings reported another dour quarter.

 Sears Holdings reported another dour quarter.

The retailer saw red in Q2 with a net loss of $395 million compared to net income of $208 million last year.

Revenue declined 8.8 percent to $5.7 billion for the 13 weeks ended July 30, and comp sales fell 5.2 percent.

Of the $548 million revenue decline, $199 million was due to fewer remaining stores, and about $75 million was attributable to revenue declines at its Sears Hometown and Outlet Stores spinoff.

Broken out by chain, Kmart comps declined 3.3 percent on weakness in CE and other categories, which offset gains in mattresses and toys.

At Sears, comps decreased 7 percent on declines in its core home appliances, lawn and garden, and tools categories, as well as in CE.

According to TWICE’s Top 50 Major Appliance Retailers report, Sears’ majap sales fell by 19 percent, or $1 billion, last year, while white-goods sales slipped 16 percent at Kmart.

Related: In Appliances, Sears’ Pain Is Independents’ Gain

Chief financial officer Rob Schriesheim said asset sales and some $1.3 billion in financing during the first half, and a $300 million loan in Q3 from chairman/CEO Edward Lampert’s ESL Investments hedge fund, has helped keep the company capitalized.

Sears said in February it intended to sell off at least $300 million in real estate and business assets during the first half of the year, possibly including its Sears Auto Center operation, to bolster liquidity.

On a conference call, Schriesheim noted that the company has also cut expenses by $1.8 billion and reduced net inventory by $1.1 billion since 2012, as part of an ongoing cost-structure optimization effort.

The finance chief also reported that retailers, OEMs and investors have expressed interest in the company’s private-label Kenmore, Craftsman and DieHard brands, which were essentially put out for bid in May.

“We continue to face a challenging competitive environment,” Lampert said in a statement. “[We] feel we are making progress in our transformation as we remain focused on our best stores, our best members and our best categories to drive our business and enhance the member experience.”

The company provided an infographic, below, which it said provides “an at-a-glance view of the [profit] opportunities we are focused on and how we are executing against each.”

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