As a result of the below expected results, shares of the parent firm of Sears and Kmart stores were down 5.7 percent in pre-market trading to $40.80.
Revenue also missed estimates
The Hoffman Estates-based retailer announced that it lost $194 million in the quarter compared to $132 million in the same period last year. Sales for the retailer continued to decline further, sliding more than 6 percent in the quarter to $8.8 billion, which marginally missed the consensus estimate of $8.9 billion.
Fewer Kmart and Sears full-line stores affected the sales of the company. Sears Holdings Corp (NASDAQ:SHLD) spun off their Sears Hometown and Outlet stores last year, which also affected the sales numbers.
For Sears, same store sales were down less than 1 percent against a 3 percent decline for the same period last year. For Kmart, sales from stores open a year was down 2.1 percent against 5 percent last year.
Positives for Sears
One of the positives for the retailer, for the quarter, was sales from stores open at least a year, which improved at both Sears and Kmart.
Earlier this year, hedge fund billionaire Edward Lampert took over as CEO of the company, and since then has been pushing the online sales to compete with online retailers including Amazon.com, Inc. (NASDAQ:AMZN). The efforts did pay off, and online sales were up 20 percent at sears.com and kmart.com.
According to Sears Holdings Corp (NASDAQ:SHLD), comparable sales of the domestic apparel, which include designs from the Kardashian family, has been on a rise for eight consecutive quarters.
Sears expected to announce asset sale
During the quarter, Sears Holdings Corp (NASDAQ:SHLD) gained $58 million from the sale of certain parts of the real estate in the U.S. and Canada. Total cash from such transactions amounted to $290 million.
Earlier this week, there were rumors that the distressed firm may announce the sale of some of its assets to fulfill the announcement made earlier by the company officials to raise $500 million in cash. So far, Sears management have not revealed any such plans.
Many of the important retailers, like Wal-Mart Stores, Inc. (NYSE:WMT) and Macy’s, Inc. (NYSE:M), have reported unimpressive quarterly results this month. Also, these retailers have released dim outlook for the year owing to uncertainty in the macro environment.