Profit drops at Sears Hometown and Outlet Stores

Lower sales and a fall in commissions led Sears Hometown and Outlet Stores Inc. to post falling profit in the first quarter.

Lower online commissions from Sears Holdings, lower initial franchise revenues, and lower delivery income helped reduce net income to $2.15 million from $3.68 million.Net sales in the first quarter of 2015 decreased 1% to $582.8 million from $589.9 million. This decrease was driven primarily by a 1.2% decrease in same-store sales.

In the hometown unit, comparable-store sales slipped 0.4%. Outlet same-store sales declined 3%.



"During the quarter our core operations, which exclude franchise sales, generated higher profits than recent quarters due to a more moderate promotional environment and good expense controls,” said CEO Bruce Johnson. “Our strong liquidity will allow us the flexibility to make investments in the business, both in-store and online, that will be designed to improve operating performance."

As of May 2, Sears Hometown dealers and franchisees operated a total of 1,248 stores across all 50 states as well as in Puerto Rico and Bermuda