Comps drop at Sears and Kmart

HOFFMAN ESTATES, Ill. Sears Holdings today announced domestic comparable-store sales for its second quarter, the thirteen-week period ended Aug. 4, for its Kmart and Sears stores. For the second quarter, Kmart comparable-store sales decreased by 3.8%, with declines across most categories. Sears domestic comparable-store sales decreased by 4.3%, with declines across most categories partially offset by increases in consumer electronics, women's apparel and footwear.

The company currently expects second quarter net income to be between $170 million and $185 million, or between $1.13 and $1.23 per fully diluted share. Since providing an estimated range of $160 million to $200 million on July 10, the company has experienced higher markdowns, most notably within seasonal apparel categories that were largely offset by lower payroll expense, including performance-based compensation, and favorable inventory shrink experience. For the second quarter last year, the company reported net income of $294 million, or $1.88 per fully diluted share.

Sears Holdings' ceo Aylwin Lewis stated, "While we recognize the housing market slowdown and other economic pressures have presented a noticeable headwind to the business, we are disappointed with our second quarter results. We will work hard to improve our financial performance going forward."