Updated! It was not the merriest of Christmases for Sears and Kmart.
With 428 fewer stores to handle the critical holiday season, the beleaguered retailer reported a 28 percent decline in total fourth-quarter revenue, to $4.4 billion, for the 14 weeks ended Feb. 3.
Same-store sales, a metric that removes the impact of store closures, fell 15.6 percent, with comps declining 12.2 percent at Kmart and 18.1 percent at Sears.
Profits, however, improved dramatically from last year’s $607 million net loss: Net income rose to $182 million, due to a $470 million benefit from tax reform legislation, and $451 million in expense reductions. The Christmas gift from Uncle Sam also offset a $72 million accounting charge related to the impairment of the Sears trade name.
“We need to do more if we are to deliver on our commitment to return to profitability in 2018,” chairman/CEO Eddie Lampert acknowledged. The plan calls for improving or closing more unprofitable stores; monetizing real estate and brand assets; cutting $200 million in annualized costs; and taking on fresh debt and extending current loans out further.
For the full year, total revenue fell 24 percent, to $16.7 billion; comps declined 13.5 percent; and net loss was $383 million, reduced from $2.2 billion the previous year.
The chain ended the fiscal year with 1,002 stores, comprised of 432 Kmart locations (down from 735 in January 2017) and 570 Sears stores (reduced from 695), and is in the process of closing about 100 more.
In an infrequent corporate blog, Lampert pointed to the company’s 2017 successes, including adjusted Q4 EBITDA of $2 million, vs. a $61 million prior-year loss; an expanded “Shop Your Way” omnichannel membership platform; new freestanding appliance and mattress specialty stores; and sales of its private-label Kenmore and DieHard products on Amazon (see infographic below).