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Sears previews 1Q report

Hoffman Estates, Ill. - Ahead of its annual shareholder meeting tomorrow, Sears Holdings announced its first quarter net income from continuing operations was between $155 million and $195 million compared to a net loss in last year's 1Q of $165 million.

For the quarter ended April 28, total comps were down 1.3%. Comps at Kmart fell 1.6% while same-store sales at Sears U.S. stores were down 1.0%.

While Sears Domestic experienced an overall sales decrease, Sears achieved double-digit increases in its apparel and footwear categories. These increases were offset by declines in the appliances and consumer electronics categories. Kmart's comparable store sales decrease reflects increases in the apparel and footwear categories, offset by declines in the consumer electronics category.

Sears Canada expects to report a comparable store sales decline of 6.2% for the quarter. The hardest-hit categories were electronics, home decor, hardware and apparel, partially offset by increases in major appliances and mattresses.

The company expects to end the first quarter with approximately $8.9 billion in merchandise inventories (domestic of $8.1 billion and $0.8 billion at Sears Canada) as compared to $9.7 billion of inventory last year.

On April 17, Sears Holdings completed the sales of 11 properties to General Growth Properties for $270 million in net cash proceeds. In addition, Sears Canada, a consolidated, 95%-owned subsidiary of Sears, completed its transaction with The Cadillac Fairview Corporation Limited to surrender and early terminate the leases on three properties for $170 million Canadian in cash proceeds on April 20.

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