Sears Hometown and Outlet Stores' (NASDAQ:SHOS) CEO and President Bruce Johnson reported disappointing results for the company's latest quarter, as comparable store sales declined 2.3 percent, with Hometown stores specifically dropping 6.2 percent. The bright spot in the quarter was a 9.3 percent increase in Outlet comparable store sales.
"While we were disappointed in our overall results, we are pleased that customers responded to our initiatives in Outlet, which generated 9.6 percent adjusted comparable store sales growth," said Johnson. "These initiatives included strong execution by our employees and franchisees as well as improvements in product procurement, marketing and pricing. Our goal is to continue to build upon these improvements going forward."
Hometown store sales continued to be affected by the highly promotional environment. And Johnson said that results were also adversely affected by the growth of online sales of home appliances at other retailers.
He also blamed the company's ties to Sears Holdings (NYSE:SHLD), which sold off the Hometown and Outlet segments of the business two years ago in an effort to cut costs.
"While our online commissions grew in the quarter, our rights to engage in our own online initiatives that would leverage sears.com (which is owned and operated by Sears Holdings Corporation), and our rights to engage in our own online initiatives that would be independent of sears.com, are constrained by our agreements with Sears Holdings Corporation that were entered into prior to our October 2012 separation," said Johnson.
Net sales in the quarter increased $4.1 million, or 0.7 percent, from the same quarter in 2014.
In the spring of 2013, Sears Hometown and Outlet Stores joined forces with B2C negotiating platform Netotiate, giving online shoppers a tool for negotiating their own bargains and generating a reported uptick in sales for the retailer. Since the platform was introduced, SHOS has shown double-digit conversion rates, and revenue per visit has increased within categories enabled by Netotiate services.
-See this Sears Hometown and Outlet Stores press release
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