Sears reports net loss on decreasing same-store sales
Sears Holding (NASDAQ: SHLD) owner of retailers Sears and Kmart, reported losses for the fourth quarter and financial year 2011 before the market opened this morning. Net loss was $2.4 billion in the fourth quarter for the Hoffman Estates, Illinois-based company. The company earned $0.4 billion in the same quarter last year.
Same store sales declined 3 % for Sears stores located in the U.S. in 2011, 1.4 %for Kmart stores and 7.7 %for Canadian stores. Total sales declined from $42.7 billion at the end of 2010 to $41.6 billion for 2011. Losses per share were $29.40 for the year, compared to earnings per share of $1.19 last year.
Sears had lower margins on apparel, toys and consumer electronics. Apparel margins were reduced by higher commodity costs and high inventories. The company also had fewer sales of traditionally strong outerwear brands, like Lands' End, since the winter was unseasonably warm.
Sears announced plans to sell 11 stores to General Growth Properties (NYSE: GGP) for $270 million on the heels of completing the sale of Orchard Supply Hardware Stores at the end of 2011. It also plans to raise $400 to $500 million by selling the Sears Hometown Stores, outlet business and some hardware stores to shareholders.
Sears shares have climbed on company's plan to increase capital, rising 14.3 %to $59.51, the stock's highest level this year, in pre-market trading this morning.
© 2016 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.