Sears Canada swings to loss in Q4

Toronto – Sears Canada Inc. swung from profit to loss in a dismal fourth quarter of fiscal 2014. The retailer reported a net loss of $123.6 million in the fourth quarter of fiscal 2014, compared to net income of $373.7 million in the same period a year earlier.



The net loss included a pre-tax asset impairment charge of $99.3 million related to leasehold improvements in full-line and Hometown stores, and intangible assets. In addition, the net income a year earlier included several one-time tax gains, real estate sales and legal settlements.



Total revenues fell 18% to $972.5 million from $1.18 billion. Same-store sales dropped 9.1%. Revenue decline was driven by store closings and the sale of joint arrangement interests in fiscal 2013.



"These results are disappointing and not indicative of the potential that exists within Sears Canada," said Ron Boire, who was named president and CEO of Sears Canada in January 2015. "Despite the fourth quarter operating results, we increased our position of cash and cash equivalents by $24.7 million during the fourth quarter to $259 million. In addition, we are accelerating implementation of key initiatives related to product development and system infrastructure while continuing to focus on prudent management of expenses, investment of inventory and efficiency of our network.”



For the full fiscal year, Sears Canada swung to a net loss of $338.8 million from net income of $446.5 million. Revenues decreased 14% to $3.42 billion from $3.99 billion. Same-store sales for the year decreased by 8.3%.