Sears Holdings reported sharply lower quarterly earnings Thursday, sending its shares down more than 13 percent, as sales fell at its U.S. Kmart and Sears stores and it cut prices to rid itself of excess inventory.
The company said sales and margins would probably remain under pressure for the current quarter, as the softer U.S. housing market and credit concerns hurt customer spending during the critical holiday shopping season.
"Kmart and Sears have been in a downward spiral for the last two years," said Britt Beemer, founder of America's Research Group. "I think you're in a major free fall."
Sears Holdings shares tumbled as much as 13.28 percent in Thursday trade on the Nasdaq.
Beemer said Thanksgiving weekend surveys by his group indicated that that both chains have 20 percent fewer shoppers than they did three years ago.
There has been "no effort to make Kmart or Sears competitive," Beemer said.
The company was created by the 2005 merger of Sears, Roebuck and Kmart.
Net income fell 99 percent to $2 million, or 1 cent per share, for the third quarter ended Nov. 3 from $196 million, or $1.27 per share, a year earlier.