Sears Reports Deeper Loss; CE Sales Lower

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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 and 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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