Sears narrows Q4 loss as it cuts costs and inventory; sales drop 14%

Hoffman Estates, Ill. - Sears Holdings Corp. narrowed its loss for the fourth quarter as it lowered expenses and reduced inventory.



Sears said Thursday that it lost $358 million for the period ended Feb. 1, compared with a loss of $489 million a year ago.



Sales plunged 14% to $10.6 billion, from $12.3 billion. Sears’ revenue performance was hurt partly by having one less week in the latest quarter and having fewer Sears and Kmart stores, the company said.



Same-store sales fell 6.4%. At Sears stores, the metric was down 7.8%. It fell 5.1% at Kmart.



For the fiscal year, Sears reported a net loss of $1.4 billion, compared to a $930 million net loss in the previous fiscal year.



Revenues also declined during the fourth quarter and fiscal year. Quarterly revenues dropped 14% to $10.6 billion from $12.3 billion, and annual revenues declined 9% to $36.2 billion from $39.9 billion. Same-store store sales declined 3.8%, with decreases of 3.6% at Kmart and 4.1% at Sears Domestic.



Sears cited costs of transforming into a “member-centric” retailer using an integrated online platform and the omni-channel Shop Your Way membership program, as contributing to its net losses. Declining revenues were attributed to lower same-store sales and having fewer stores in operation.



“During 2013, we made progress in our continuing transformation into a member-centric retailer leveraging Shop Your Way and integrated retail, which we believe will position us for enhanced growth and profitability to create long-term shareholder value,” said Edward S. Lampert, Sears Holdings' chairman and CEO. “Our full year results are impacted during this transformation as we continue supporting traditional promotional programs and marketing expenditures while we invest in our Shop Your Way program and integrated retail strategy. We have been investing hundreds of millions of dollars annually in our transformation and will continue to invest in the future of the company.”



The company said it continues to explore “strategic alternatives” for its auto centers and Lands’ End business.