Feb 9, 2016
Sears posts 7.1 pct drop in 4th-qtr sales at established stores
Feb 9, 2016
Sears Holdings Corp estimated quarterly sales below analysts' expectations, citing unseasonably warm weather and intense competition, and said it would speed up closure of at least 50 unprofitable stores in the next few months.
The struggling retailer's shares fell 3.4 percent to $16.16 in light premarket trading on Tuesday.
A warmer-than-expected winter in 2015 dented sales of cold-weather apparel and goods in the United States, forcing retailers such as Macy's Inc and Kohl's Corp to warn of disappointing sales for the period.
November and December are crucial for many retailers as the two months can account for anywhere between 20-40 percent of annual sales.
Sears estimated sales of $7.3 billion for the three months ended Jan. 31, below the $7.43 billion analysts on average had expected, according to Thomson Reuters I/B/E/S.
Once the largest retailer in the United States, Sears has lost its standing as customers preferred to either shop online or at rivals such as Target Corp and Wal-Mart Stores Inc.
The company is working to cut costs by creating a real estate investment trust Seritage Growth Properties, shutting stores and cutting jobs.
Sears said it planned to cut costs by $550 million-$650 million in 2016, depending on overall volume of sales, adding that it targeted at least $300 million in asset sales during the first half of the year.
The company reported a 7.1 percent drop in sales at established stores during the holiday quarter, hurt by weak demand for apparel - a business that has a "substantial impact" on overall profitability.
Sears said it expects to report fourth quarter results around Feb. 25.
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