Sears Q4 loss deeper after competitive holiday season

February 26 02:38 2016

Sears (SHLD) reported a fourth quarter loss Thursday well below expectations after struggling through a competitive holiday season. Sears warned earlier this month that it didn’t expect to fare well in the quarter ended Jan. 30 and said it would accelerate 50 planned store closures this year as well as look for other ways to cut costs. The company ended the year with 1,672 Sears and Kmart stores.AP SEARS BUILDINGS F A USA MA

Like other retailers, Sears sales suffered due to unseasonably warm weather in November and December, said CEO Edward Lampert in a company statement. He also said that the heightened competition during the busy holiday season led to “higher than expected markdowns.” Sales at Sears and Kmart stores open at least a year fell 6.9% and 7.2% respectively. Still, those declines were the best sales performance of the year, the company said.

Consumer electronics sales were a sore point for both brands, impacting the sales declines by several percentage points. Apparel, grocery and home items also saw sales declines at Kmart, while Sears saw declines in apparel, footwear, home, tools and sporting goods. Lampert reiterated that the company plans to accelerate the timeline of its transformation into a retailer better integrated with digital services and focused on a member loyalty program to drive sales. Sears plans to reduce costs by $550 million to $650 million this year, after cutting approximately $150 million in expenses in the fourth quarter.

The company reported a loss of $580 million, or $5.44 per share, compared with a loss of $159 million, or $1.50 a share, in the year-ago quarter. That missed analyst forecasts for a loss of $2.62 a share, according to S&P Global Market Intelligence. Revenue came in at $7.3 billion, down from $8.1 billion in the year-ago quarter, but in line with analyst expectations. Most of the revenue decline was due to same-store sales falling, though some of it was attributed to having fewer Sears and Kmart stores.