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Sears Hometown and Outlet sales decline


Sears Hometown and Outlet stores narrowed its loss in the third quarter despite weak sales growth in the appliance and garden categories.

The retailer said same-store sales decreased 1.6% in the third quarter ended Oct. 31. Net sales fell 3.2% to $547.1 million as the company reported a loss of $3.8 million, or 17 cents a share, compared with a loss of $171.2 million, or $7.55 a share, a year earlier.

"While our inventory position improved during the quarter, the increasingly competitive promotional environment impacted the value proposition of "as-is" home appliances as competitors reduced prices for new in-box appliances," said Will Powell, CEO and president. "We reduced selling and administrative expenses on both a dollar basis and a rate basis in the quarter. Also, Adjusted EBITDA was negatively impacted by our previously announced store-closing initiative, which resulted in 53 closings during the quarter. Sales were down in lawn and garden, we believe due to unseasonably warm weather that delayed fall clean-up and snow-thrower sales in several parts of the country."

In the third quarter of 2015, the company opened 10 new stores (five in Hometown; five in Outlet) and opened a total of 28 new stores in the first three quarters of 2015 (15 in Hometown; 13 in Outlet). Of the 13 new Outlet stores, it converted eight from Hardware stores. In these converted locations, the company expects future profit results to improve and inventory working-capital requirements to decline significantly.

"Thus far in 2015, we have taken steps to better align operating costs with recent performance and to improve the quality and speed of execution of our plans by restructuring the executive team and reducing overall payroll and benefits costs at our support center and in our field organization. These changes resulted in savings of over $1 million in the third quarter of 2015, and we expect to achieve savings of $2 million for the full year 2015," Powell said.

As of Oct. 31 the company operated 1,172 stores across all 50 states as well as in Puerto Rico and Bermuda.

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