Profit drops at Sears Hometown and Outlet Stores

Sears Hometown and Outlet Stores Inc. said lower sales and a drop in commissions led to falling profits 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.



Bruce Johnson, CEO and president, struck an optimistic tone in his comments, despite the disappointing performance.



"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 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.