- Prachi Singh |
Sears reported a net loss attributable to Holdings' shareholders of 748 million dollars or 6.99 dollars per diluted share for the third quarter of 2016 compared to a net loss of 454 million dollars or 4.26 dollars per diluted share for the prior year third quarter. Adjusted EBITDA was 375 million dollars for the quarter compared to 332 million dollars in the prior year third quarter.
Commenting on the company’s trading, Edward S. Lampert, Holdings' Chairman and Chief Executive Officer, said, "We remain fully committed to restoring profitability to our company and are taking actions such as reducing unprofitable stores, reducing space in stores we continue to operate (including through the Seritage lease arrangement), reducing investments in underperforming categories and improving gross margin performance and managing expenses relative to sales in key categories.”
Posts 721 million dollars decline in Q3 revenues
The company’s revenues decreased approximately 721 million dollars to 5 billion dollars for the quarter compared to 5.8 billion dollars for the quarter ended October 31, 2015. The company attributed this year-over-year decline in revenues to having fewer Kmart and Sears full-line stores in operation, which accounted for 323 million dollars of the decline, as well as a 7.4 percent decline in comparable store sales during the quarter, which accounted for 304 million dollars of the revenue decline.
At Kmart, comparable store sales decreased 4.4 percent. The company said, while overall comparable store sales declined in Kmart segment driven by declines in the grocery & household, consumer electronics and pharmacy categories, comparable store sales increased in several categories this quarter, including apparel, jewelry and outdoor living. Sears Domestic comparable store sales decreased 10 percent during the third quarter of 2016, primarily driven by decreases in the home appliances, apparel and consumer electronics categories.
During the third quarter, gross margin decreased 300 million dollars compared to the prior year third quarter due to the above noted decline in sales, as well as a decline in gross margin rate in both the Kmart and Sears Domestic segments. The decline in margin rate in both segments, Sears said, was primarily driven by a decline in gross margin performance in the apparel business, as well as an overall increase in markdowns.