The situation at Sears (Nasdaq: SHLD) has become even more dire as the retailer exits a particularly devastating holiday sales season. The company reported on Thursday that comparable store sales at its Kmart and Sears stores tanked during November and December, continuing a year-long decline. Investors reacted strongly to the news, which sent shares tumbling 13.7 percent in after-hours trading.
According to Sears Holding Corp., same-store sales at Kmart and Sears chains fell 7.4 percent for the quarter to date in the U.S. Broken out, comparable store sales fell 5.7 percent at Kmart stores and 9.2 percent at Sears locations. Same-store sales is a key measure for retailers as it strips away the impact of recently opened or closed stores.
Kmart's performance in most categories declined, with consumer electronics, grocery items and toys suffering the most. Sears also saw widespread declines, particularly among electronics, tools and home appliances.
For the fiscal year, which ends Feb. 1, Sears expects a net loss of between $1.3 billion and $1.4 billion, or between $11.85 and $12.88 per share. That's significantly worse than the previous fiscal year's net loss of $930 million, or $8.78 per share. Earnings results for the fourth quarter and fiscal year will be released at the end of February.
Following the financial announcement, Sears chairman and CEO Edward Lampert took the newly-launched Sears Holdings Corp. blog, "SHC Speaks," to share his personal thoughts on the sales slump. Lampert remained optimistic about his company, highlighting that management is committed to giving their all in hopes of a turnaround.
"The results that we posted are not nearly what we want them to be," Lampert wrote. "They also overshadow all of the work that's being done by our associates, our vendors and the other businesses we work with, along with everyone who is developing better ways for us to serve our members. The annual investment associated with these activities is measured in hundreds of millions of dollars and hundreds of thousands of hours of hard work by our associates and the other members of the team."
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