Sears loss widens but beats estimates - USA
ChainStoreAge.com - Dec 8th 2014, 09:38
Illinois – Sears Holdings Corp. reported a third quarter fiscal 2014 net loss of $548 million, up from the $534 million loss it reported in the year-ago period but smaller than its previously estimated. Cost-cutting measures helped Sears reduce its net loss growth.
The discounter also revealed that it plans to close 235 underperforming stores in 2014, which is nearly double the projection of 130 it made in August. Sears said eliminating those stores should boost EBITDA by $50 million.
“Our stores are often in the wrong place and are often too large for our needs,” CEO and chair Eddie Lampert said in a pre-recorded conference call for investors early Thursday.
The quarter marks the retailer’s eighth straight year of sales declines and its fourth straight year of losses, according to FactSet.
"Over the past several months, we have taken a number of actions to enhance our financial flexibility, support our operations during the upcoming holiday and post-holiday season, and meet our obligations,” said Rob Scriesheim, CFO of Sears.
“In total, the actions we have taken have generated $2.2 billion in liquidity in fiscal 2014 thus far. We will continue to strategically monetise assets and manage our resources more efficiently in order to redeploy capital in support of the transformation."
Revenues decreased 13% to $7.2 billion from $8.3 billion. Sears cited the separation of the Lands’ End business, as well as store closures and deconsolidation of the Sears Canada business, as contributing to declining revenues.
Domestic same-store sales dropped 0.1%. Same-store sales at Kmart rose 0.5%, while comparable-store sales at Sears fell 0.7%.
Things looked better on the digital front. Online and multi-channel sales grew approximately 9% as Sears continues to transform to an integrated retail platform - with shopping at the store, online and on mobile.
“During the quarter, we unveiled or expanded several integrated retail customer initiatives, which helped drive online and multi-channel sales,” said Edward Lampert, chair and CEO.
While some analysts have publicly questioned Sears’ long-term ability to maintain operating cash, the company said it has cash balances of $326 million and can borrow up to $1.5 billion on its credit facility.
Sears said that its long-term debt has declined slightly to $2.8 billion from $2.9 billion a year earlier. To date, the company has $2.2 billion in liquidity for fiscal 2014. It had approximately $1.5 billion available under its credit facility as of Wednesday.From ChainStoreAge.com
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