Sears Loss Grows in Q3

SearsHOFFMAN ESTATES, Ill.-Declines in sales and a jump in promotional activity made the ink in Sears Holdings' bottom line redder in its fiscal third quarter, ending on Nov. 2.

The company posted a net loss of $534 million in the quarter, compared to a net loss of $498 million in last year's third quarter. Net sales were down 6.6 percent to $8.3 billion, with corporate same-store sales off 3.1 percent. Comparable-store sales at Sears' domestic stores fell 4 percent, while same-store sales at Kmart declined 2.1 percent.

Within product categories, a Sears Holdings statement said home was one of the few areas at Sears stores in which sales increased. The chain reported sales drops in consumer electronics, lawn and garden, tools, home appliances, apparel and at Sears Auto Centers. At Kmart, most of the decreases occurred in grocery, household, drug, consumer electronics and toys.

In addition, gross margin at both Sears and Kmart felt the impact of promotional discounts and points given to members of Shop Your Way, the company's free and members-only program and shopping community that offers rewards, personalized deals, product reviews and services such as e-coupons and e-receipts for faster returns and exchanges. The company's overall gross margin fell 210 basis points to 23.3 percent. Selling, general and administrative expenses were slimmed by 9.4 percent in dollars and 90 basis points as a percentage of sales, to 27.3 percent.

Edward Lampert, Sears Holdings' chairman and CEO, said the company is continuing its efforts to transform its business model from running a store network to an integrated store/in-home/online shopping platform, centering on Shop Your Way. "Throughout this transition, we have continued with traditional promotional programs and marketing expenditures while investing in our member-centric model, which has impacted our margin and expenses," Lampert said. "While transformations of this scale are challenging, we believe we are making progress as we are seeing substantive continued increases in our (Shop Your Way) member engagement metrics."

HFN Staff | News & Commentary

HFN provides detailed information on the key home classifications: Housewares, Tabletop, Floor Covering & Rugs, Furniture, Home Textiles, Lighting, Home Decor, Mattresses & Bedding, Gifts, Major Appliances and Consumer Electronics as well as Business, Finance and Retail.

Research Store

Videos

  • Retailers Share Why They Attended HFN’s Omnichannel Summit

    Camera Icon   More Videos

Subscribe to
HFN Omnichannel
Receive the news you need to know about the trends in the industry delivered right to your inbox.

Current Issue

  • HFN cover October 2017

    HFN's DIGITAL EDITION

    October 2017


    COVER STORY:

    One Kings Lane Flashes Forward

    Formerly a flash-sale only website, One Kings Lane—now under the ownership of Bed Bath & Beyond—evolves into a lifestyle retailer with a new physical presence.


    ALSO IN THIS ISSUE:

      •  HFN Tech & Omnichannel Study- Although e-commerce shopping is increasing dramatically among consumers, home retailers lag in their current and future tech investments and implementation.
      • Market Previews: High Point & Tabletop- The newest collections and influencer trends emerge in our High Point Market and N.Y. Tabletop Show special sections.