Sears reported a loss of $146 million, or $1.16 per share, compared with year-ago profit of $4 million, or 3 cents per share. Excluding a hefty charge related to 14 store closings and gains on Sears Canada hedges, Sears posted a loss of 90 cents per share in the latest period.
Revenue dropped 8 percent to $10.66 billion from $11.62 billion as Sears U.S. same-store sales slid 10.6 percent and Kmart same-store sales slipped 7 percent. Total same-store sales, or sales at stores open at least a year, a key retail gauge, fell 9 percent.
Analysts surveyed by Thomson Reuters expected a much smaller loss of 49 cents per share on higher revenue of $10.93 billion.
Sears said it will take a pretax charge of $21 million in the fourth quarter, related to the closing of eight underperforming stores. The company said it will continue to evaluate additional store closings or divestitures, remodels, acquisitions and stock and debt repurchases to boost financial flexibility.
Sears withdrew its forecast for earnings before interest, taxes, depreciation and amortization, citing the severe economic slowdown.
In August, the company had said EBITDA in the second half of the year would exceed 2007 levels, but full-year results would be comparable year-over-year. However, the forecast had assumed flat to modest same-store sales declines in the third and fourth quarters, but third-quarter same-store sales ended up falling off sharply and in November, domestic Sears and Kmart same-store sales dropped a combined 8.7 percent.
Year to date, adjusted EBITDA totaled $722 million, less than half the $1.52 billion reported as of Nov. 30, 2007.
Aside from closing underperforming stores, Interim Chief Executive and President W. Bruce Johnson said in a statement that Sears has prepared for a challenging holiday season by cutting inventory and reducing expenses. The company also has resurrected layaway programs at both Kmart and Sears locations to provide consumers with another payment option. Layaway programs enable customers to make small payments toward the purchase over a set period of time.
Sears, whose proprietary brands include Kenmore and Craftsman, repurchased 1.4 million shares during the quarter. The company had about 123.6 million shares outstanding as of Nov. 28. The retailer runs about 3,900 stores in the U.S. and Canada.
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