Sears swings to loss on falling sales and one-time costs

Hoffman Estates, Ill. Sears Holding Corp. reported a quarterly loss on Thursday instead of the profit Wall Street was expecting, dragged down by lower sales and one-time costs related to store closings and severance and pension-plan expenses.

The retailer posted a net loss of $94 million in the second quarter ended Aug. 1, compared with a year-earlier profit of $65 million. Revenue fell 10.3% to $10.55 billion. Analysts on average were expecting revenues of $10.73 billion, according to Reuters Estimates.

The weak housing market cost it sales in home-improvement and appliance categories at Sears department stores, and clothing sales were weak at both Sears and its Kmart discount chain.

Same-store sales at Sears stores fell 12.5%, while Kmart's same-store sales slid 3.9%. Overall, same-store sales fell 8.6%, and the decline accelerated after slowing during the past two quarters.

"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," said interim CEO W. Bruce Johnson.

The company has been focused on cutting costs through better management of its inventory and other expenses. It said it decided to close 28 stores during the quarter, out of about 3,900.

Sears continued its share buyback program, spending $94 million during the quarter. It said it still had authority to buy $371 million of its shares.