Sears reported a narrower-than-expected first-quarter loss on Thursday, sending shares of the stock climbing in premarket trading.
But revenue and same-store sales continued to decline at a double-digit pace, as Sears and Kmart stores suffered weak foot traffic and tough price competition.
Sears also announced Thursday that it's boosting its cost-cutting efforts to $1.25 billion, from a prior target of $1 billion, and reviewing its fleet of stores while it tries to regain its financial footing.
Here's what the company reported vs. what the Street was expecting:
- Earnings per share: an adjusted loss of $2.15 vs. an expected loss of $3.05, according to two Thomson Reuters analysts who continue to cover the company
- Revenue: $4.3 billion vs. a Thomson Reuters forecast for $4.05 billion
- Same-store sales: an 11.9 percent decline vs. a FactSet estimate for a decline of 12 percent
Shares of Sears' stock were climbing by as much as 25 percent, up nearly $2, at one point Thursday morning.
Sears posted its first quarterly profit in almost two years, with net income attributable to Sears' shareholders that was $244 million, or $2.28 per share, compared with a loss of $471 million, or $4.41 per share, a year earlier.
The company's profit was boosted by the sale of its Craftsman brand to Stanley Black & Decker, which happened in March, for an upfront payment of $525 million.
Adjusted for these types of significant items, Sears lost $230 million, or $2.15 per share, compared to a loss of $199 million, or $1.86 per share, one year ago. A survey of two analysts by Thomson Reuters had forecast an adjusted loss of $3.05 a share.
Meanwhile, Sears' total sales declined a whopping 20.3 percent, to $4.30 billion, coming in slightly higher than what analysts were anticipating.
Revenue was hurt by lower demand for groceries, household items, pharmacy and apparel at Kmart stores, and fewer sales of home appliances at Sears, the retailer said. Sears also saw weakness in its apparel and lawn and garden categories.
Sears' U.S. stores saw their same-store sales drop 12.4 percent, while at Kmart stores they fell 11.2 percent during the first quarter. Overall, Sears comparable sales fell 11.9 percent — a narrower decline that what Wall Street was expecting.