Sears reports unexpected loss in Q2 results

HOFFMAN ESTATES, Ill. Sears Holdings announced an unexpected loss for the second quarter 2009. The company reported a net loss of $94 million, or 79 cents per diluted share, as compared with net income of $65 million, or 50 cents per diluted share, in the second quarter 2008.

"While the overall retail market remains difficult and its impact is reflected in our results, we continue to take actions to increase the efficiency of our operations. We have reduced our selling and administrative expenses by approximately $1 billion over the past four quarters, including a reduction of $212 million this quarter," said W. Bruce Johnson, Sears Holdings' interim CEO and president.

Total revenues decreased $1.2 billion to $10.6 billion for the second quarter, as compared with total revenues of $11.8 billion for the prior year. According to the company, the decrease was primarily due to lower same-store sales and included a $126 million decline due to the impact of foreign currency exchange rates.

Domestic same-store sales declined 8.6% in the aggregate, with Sears Domestic same-store sales declining 12.5% and Kmart same-store sales declining 3.9% for the quarter. Sears attributed the decline at Sears Domestic to categories impacted by housing market conditions, including the home appliances category, as well as lower apparel sales. The decline in same-store sales at Kmart was driven by a decline in apparel and was partially offset by an increase in sales of home electronics and the impact of assuming the operations of its footwear business from a third party effective Januart 2009, the retailer reported.