Sears 2Q Loss Widens; Markdowns Hurt Sales, Margins |
| Wall Street Journal - Aug 18, 2011 |
Sears Holdings Corp.'s (SHLD) fiscal second-quarter loss widened more than expected as weak sales, poor customer traffic and greater discounting weighed on the bottom line.
Chief Executive Lou D'Ambrosio on Thursday told staff in a memo viewed by Dow Jones, "There are many bright spots throughout the company" aimed at cultivating growth. The company is rolling out "many innovative" products in the appliance area, an exclusive line by the Kardashian sisters and "our sporting-goods team continues to innovate on models to bridge the physical and digital," he wrote.
The memo followed another round of disappointing results for Sears, including a decline in sales at domestic stores open more than a year, the effect of fewer Sears full-line and Kmart stores and a 5.8% drop in comparable-store sales at its Canadian unit. Decreases in sales at U.S. Sears stores were primarily driven by consumer electronics, the company said. Although sales declines at namesake U.S. stores eased, gross margins suffered from markdowns to clear seasonal inventory and promotional activity, the company said.
During the second quarter, the company said it saved $48 million as it closed 29 stores, converted 14 Sears Grand stores to Kmart stores and closed seven product repair center locations, among other actions. Sears is controlled by billionaire hedge fund investor Eddie Lampert and has been criticized for cutting costs by closing stores instead of improving their appearance and the customer experience at its locations.
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- Posted: 2011-08-18 14:17:41
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