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Sears Hometown fiscal 1Q profit drops 27 percent

HOFFMAN ESTATES, Ill. (AP) -- First-quarter earnings plunged 27 percent for Sears Hometown and Outlet Stores Inc., as a cold start to spring and rising costs hurt the Sears Holdings Corp. spinoff company.

The Hoffman Estates, Ill., company said Friday it earned $15 million, or 65 cents per share, in the quarter that ended May 4. That compares with net income of $20.6 million, or 89 cents per share in the 2012 quarter.

Revenue slipped 3 percent to $601.1 million.

Sears Hometown shares began trading publicly last October. The company has 1,253 stores and mostly sells home appliances, hardware, tools and lawn and garden equipment.

It said revenue from stores open at least a year fell 5 percent, driven mainly by lower sales of lawn and garden equipment due to colder weather in large parts of the United States during February and March. CEO Bruce Johnson said in a statement that sales of lawn and garden equipment from established stores sales sank 45 percent in the quarter's first two months before rebounding in April.

Sears Hometown also said it booked $5.7 million in higher operating costs compared with last year because it is now operating as an independent public company. Selling, general and administrative expenses climbed 4.3 percent to $127.2 million.

Sears Hometown shares closed at $52.50 on Thursday and have climbed 61 percent so far this year after closing 2012 at $32.56.