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Sears Holdings posts smaller Q1 loss, helped by lower expenses

Last updated: 16:50 08 Jun 2015 BST, First published: 14:50 08 Jun 2015 BST

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Sears, which has been closing stores and slashing costs to return to profitability, reported its 12th straight quarterly loss today.

Sears Holdings (NASDAQ:SHLD), the struggling retailer run by hedge fund manager Edward Lampert, reported a smaller loss in its fiscal first quarter, after cutting expenses.

Net loss shrank to $303 million, or $2.85 per share, for the quarter ended May 2, from a loss of $402 million, or $3.79 per share, a year earlier, the Hoffman Estates, Illinois-based company said in a statement today.

Stripping out items, adjusted loss for the quarter was $2.00 per share, compared to $2.03 per share in the year-ago quarter.

Revenue fell 25.3 percent to $5.88 billion. 

The company attributed the decline in revenue to the loss in revenue of $697 million associated with Sears Canada, which was deconsolidated in October 2014.

Comparable sales at U.S. stores declined 10.9 percent in the quarter.

Sears, which has been closing stores and slashing costs to return to profitability, reported its 12th straight quarterly loss today. It cut selling, general and administrative spending by about 20 percent over the previous year, whittling down its payroll and advertising budgets. 

“During the first quarter, we made significant progress in our transformation from a traditional, store-network based retail business model to a more asset-light, member-centric integrated retailer leveraging our Shop Your Way platform," chief executive officer Edward Lampert said in the statement.

The company expects its plan to spin off 235 Sears and Kmart stores into a real estate investment trust to be approved by the Securities and Exchange Commission this week, paving the way for a rights offering to sell shares in the REIT to existing shareholders on Friday.

The retailer, which has lost $7 billion over the past four years, expects to receive about $2.6 billion in proceeds from the sale early in July.

That deal, if accomplished, should buy Sears time to pursue a revival strategy that involves a loyalty program and shrinking its presence to its best-performing stores.

Shares fluctuated between gains and losses and were last trading at $40.40, down 0.8 percent. The stock has lost 49 percent over the past five years, but was up 23 percent this year.

 

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