Hoffman Estates, Ill. — Sears Holdings reported a deeper net loss and lower comp store sales for its Sears and Kmart operations in its fiscal third quarter, ended Oct. 27.
Net loss from continuing operations in the quarter was $498 million, compared with a $410 million loss in the prior year’s third quarter. Operating loss was $428 million in the third quarter, compared with the prior year’s $447 million.
Sears Domestic's comp-store sales declined 1.6 percent in the third quarter of 2012, Kmart's comp-store sales declined 4.8 percent, and Sears Canada's comp-store sales declined 5.7 percent.
Revenues decreased $548 million to $8.9 billion for the fiscal third quarter compared with the prior year. The decline in revenue was primarily due to the effect of having fewer Kmart and Sears Full-line stores in operation and lower domestic comp-store sales for the quarter. Sears Canada's comp-store sales also decreased and included an increase of $15 million due to changes in foreign currency exchange rates, the company said.
Lou D'Ambrosio, Sears Holdings' CEO and president, said that in the third quarter and year to date, “We improved EBITDA, accelerated our strategic actions,” and the improvement came in part from major appliances. However, consumer electronics was a disappointment, the company said.
During the quarter, Sears saw increased comp-store sales in home appliances at Sears Domestic, but “the largest impact at both Sears Domestic and Kmart was in consumer electronics, which continues to be negatively impacted by price compression, as well as market shifts such as moves to smartphone technology and away from digital cameras, GPS devices, MP3 players and camcorders in addition to transitions to online gaming and applications,” Sears Holdings said.
Adjusting for the decline in consumer electronics, Sears Domestic comp-store sales were up over the prior year, the parent company said.