Sears Hometown swings to preliminary loss in tough Q4

Hoffman Estates, Ill. – Increased selling, general and administrative (SG&A) expenses helped swing Sears Hometown & Outlet Stores Inc. to a net loss in a generally tough fourth quarter of fiscal 2014. Sears Hometown & Outlet reported an preliminary, unaudited net loss of $4.63 million, compared to net income of $3.72 million in the same quarter of the previous fiscal year.



Net sales dropped 7% to $562.34 million from $602.48 million, partially driven by a 7.7% decline in same-store sales.



"Fourth quarter results were disappointing, especially in our Hometown segment,” said Bruce Johnson, CEO and president. “This segment continues to be adversely affected by the continuing highly promotional environment for major home appliances."



Johnson said significant franchising activity also negatively impacted Hometown performance.



For the full fiscal year, the retailer reported a net loss of $168.8 million, compared to net income of $35.5 million in fiscal 2013. Net sales decreased 3% to $2.4 billion. This decrease in sales was partially driven by a 5.7% decrease in same-store sales.



Looking ahead to fiscal 2015, Sears Hometown and Outlet Stores intends to test several initiatives that focus on the top 10 appliance brands; boost the selling skills of associates, independent dealers and franchisees,; enhance service levels from product selection to delivery, and offering the lowest prices with a price match program. The company also intends to continue sourcing initiatives and operational efficiencies in its Outlet segment, and is enhancing online capabilities with improvements in online marketing and user experience.