Sears Profit Drops 40% on Weak Sales
Sears Holdings' second-quarter profit dropped 40 percent on lower overall sales and weaker operating results from Kmart and its domestic Sears operations.
Sears earnings reported Thursday by one of the nation's biggest retailers were also being compared with results that included a gain on a large legal settlement a year ago.
"We are disappointed with our second quarter results," said Aylwin Lewis, Sears Holdings' chief executive and president.
Net income for the period ended Aug. 4 fell to $176 million, or $1.17 per share, compared with $294 million, or $1.88 per share, in the previous year.
Quarterly revenue dipped 4 percent to $12.24 billion versus $12.79 billion a year ago.
Analysts polled by Thomson Financial expected earnings of $1.13 per share. Those estimates typically exclude one-time items.
"Our gross margins came under pressure from sales declines and increased promotional activity, and as a result, our net income was significantly below last year and our expectations," Lewis said in a statement.
The company said the lower operating results at Sears Domestic and Kmart were partially offset by improved results at Sears Canada.
The prior year's results included a gain of $22 million, or 14 cents per share, related to the settlement of Visa/MasterCard antitrust litigation.