Sears narrows Q3 loss on expense control, beats Street

Hoffman Estates, Ill. Sears Holdings Corp. reported Thursday it narrowed a third-quarter loss due to effective cost-cutting and inventory-control measures.

The owner of Sears and Kmart stores posted a $127 million loss in the third quarter ended Oct. 31, compared with a loss of $146 million in the year-ago period. The results beat Wall Street expectations.

The quarterly loss was the retailer’s second consecutive, as Sears lost $94 million in the second quarter.

Third-quarter revenue fell 4% to $10.19 billion from $10.66 billion. That also topped Wall Street's estimate, which projected $9.92 billion in revenue.

Comp-store sales at Kmart stores edged up 0.5%. The retailer said sales of toys, home goods and footwear helped boost its performance.

But domestic same-store sales, including both Sears and Kmart, dropped 2.3%, with the Kmart increase offset by a 4.6% decline at domestic Sears stores.

The Sears dropoff was due to weaker sales in its home appliance, lawn and garden, tools and home-electronics categories, the company said.

The company was able to buffer the softer sales results through cost-control efforts and tight inventory management, lowering costs and expenses to $10.3 billion from $10.86 billion and lowering merchandise inventories to $10.8 billion from $10.5 billion.

The company expects a $5 million fourth-quarter charge for previously announced store closings.

Sears Holdings has about 3,900 full-line and specialty retail stores in the United States and Canada.