Sears Holdings said lower sales and a host of ledger expenses led to wider losses in its fiscal third quarter.
Net loss was $748 million for the three months, ended Oct. 29, compared with a year-ago loss of $454 million.
Revenues fell 14 percent to $5 billion due largely to store closings, while comp sales declined 7.4 percent, accounting for over 40 percent of the revenue drop.
Broken out by store group, Kmart comps decreased 4.4 percent on weakness in CE, offset by gains in outdoor, while Sears comps decreased 10 percent on declines in its core appliance category and CE.
In a pre-recorded conference call, chief financial officer Jason Hollar said the company will continue to close unprofitable stores, sub-lease in-store retail space, cut costs, and reduce or drop underperforming categories to restore profitability.
Hollar specifically cited Sears’ consumer electronics business, the size of which has been “significantly reduced” amid operating losses.
He said Sears has addressed CE by implementing “a variety of initiatives, primarily focused online, to maintain and restructure how we serve our members in the consumer electronics category.” Nevertheless, he noted, “We will not be able to completely overcome the revenue reduction in our consumer electronics business.”
In contrast, Sears said it is “reinforcing” its leadership positions in majaps and home services with new, innovative products and improved service levels and response times.
Hollar said the company also remains focused on its “member-centric integrated retail model” (see flow chart, below), and its Shop Your Way loyalty program, having invested $2 billion in the latter to date in redeemed member points.
Source: Sears Holdings
He added that Sears may continue to sell off assets to generate liquidity, including its stores, home services business, and legacy Kenmore, Craftsman and DieHard brands.
Other potential alternatives for its private-label roster include partnerships and distribution outside of Sears, the company said.
The chain operated 1,503 stores as of Oct. 29, including 403 owned and 1,100 leased locations, although that number will drop as more stores are closed in the current quarter.