By Dhanya Skariachan
Nov 21 (Reuters) - Sears Holdings Corp reported awider quarterly net loss on Thursday after sales fell at bothits namesake department stores and its Kmart discount chain andit invested in more promotions targeting rewards members.
The company is trying to engineer a turnaround. Sales havebeen falling since 2005, when hedge fund manager Edward Lampertmerged the two U.S. chains in an $11 billion deal.
The net loss in the third quarter ended on Nov. 2 widened to$534 million, or $5.03 a share, from $498 million, or $4.70 ashare, a year earlier.
Excluding severance costs, tax-related adjustments and apension expense, the loss was $2.88 a share.
Sales fell 6.7 percent to $8.3 billion, missing theanalysts' average estimate of $8.9 billion, according to ThomsonReuters I/B/E/S.
Sears has been closing stores, tightly managing inventory,selling real estate and shedding assets, but the retailer isstill struggling to generate cash from its operations.
Wall Street has criticized Lampert for not investing enoughin stores and for relying on financial engineering to boostprofits. On Thursday, he said Sears was spending more to maketargeted offers to members of its Shop Your Way rewards program.He said 70 percent of sales are now made to Shop Your Waymembers.
Sales at stores open at least a year fell 3.1 percent,including a decline of 2.1 percent at Kmart. At that chain, weakdemand for groceries, consumer electronics and toys offsetstrength in the apparel and "seasonal and outdoor living"categories.
A 4 percent drop at Sears Domestic reflects decreases inmost categories, including the consumer electronics, lawn andgarden, tools, home appliances and apparel.
At the end of the quarter, total debt was $4.7 billion.
The Hoffman Estates, Illinois-based company recentlyrefinanced some debt, sold its stake in eight properties it ownswith the Westcliff Group and terminated some store leases inCanada. It said it was on track to generate $2 billion ofliquidity during the fiscal year.
On his own and through his ESL Investments hedge fund,Lampert holds about 55.34 percent of Sears stock, according tothe latest U.S. securities filings.
- Investment & Company Information
- Edward Lampert