UPDATE: Sears Posts Wider Q1 Loss

Sears Holdings

reported a wider first-quarter loss and announced the closure of about 80 stores this year. Sears' domestic same-store sales increased 0.2% in the period, versus a 2.4% drop last year. Kmart also reported a 2.2% fall in its same-store sales. Online and multi-channel sales climbed 26% in the quarter. Sears reported a quarterly loss of $442 million, or $3.79 per share, versus a year-ago loss of $279 million, or $2.63 per share. Excluding special items, Sears lost $2.24 per share. Sears also said it may close more stores during the remainder of the year. Its revenue slipped 6.8% to $7.88 billion. Analysts were expecting a loss at $1.87 per share on revenue of $7.71 billion. Edward S. Lampert, Sears Holdings' Chairman and Chief Executive Officer said, "Our performance in the first quarter highlights the challenges we are facing as well as the progress we are making in this transformation. We are moving away from a company that was heavily based on selling products solely through a store-based network to a member-centric business model focused on providing benefits to our members anytime and anyplace. We are seeing progress in our transformation to a member-centric, integrated retailer, as we continue to invest heavily in driving our Shop Your Way program. Member sales for the first quarter represented their highest level ever, representing 74% of eligible sales. Points redemptions also increased substantially, demonstrating that our members are becoming more engaged with the program and taking advantage of the points that they are earning. While this progress continued, the biggest negative contributor to sales has been from our consumer electronics business at both Sears and Kmart. Without the poor performance of the consumer electronics business, our Sears Domestic comparable store sales would have been positive 0.8%, as compared to positive 0.2%. Finally, as we invest in our new program and platforms, we are continuing to bear the costs of two promotional models, which adversely impacts our margins." Sears shares fell 3.66% to close at $36.56 yesterday.