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Sears Hometown and Outlet 2Q profit falls

HOFFMAN ESTATES, Ill. (AP) -- Sears Hometown and Outlet Stores Inc. said Friday that its second-quarter net income dropped as it dealt with expenses tied to its spinoff from Sears Holdings Corp.

Sears Hometown and Outlet earned $9.1 million, or 40 cents per share. A year earlier it earned $21.1 million, or 91 cents per share.

The latest quarter included $6.4 million in expenses related to the retailer operating as an independent public company.

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

CEO and President Bruce Johnson said in a statement that the chain is adjusting its pricing and promotional plans, improving outlet sourcing capabilities and focusing on higher-margin products in order to boost profitability.

Revenue for the Hoffman Estates, Ill. company rose 2 percent to $656.9 million from $644.5 million, helped in part by some new store openings.

Revenue at stores open at least a year, a key indicator of a retailer's health, climbed 1.4 percent, driven mostly by an 8.2 percent rise for the outlet segment. Sales of lawn and garden products and home appliances rose, but were somewhat offset by a more than 50 percent drop in sales of consumer electronics following the company's planned exit of the consumer electronics business in most of its Hometown stores. Sales of clothing fell at outlet locations.

Revenue at stores open at least a year excludes results from stores recently opened or closed.

Sears Hometown and Outlet also announced that its board approved a $25 million buyback. The program does not have a specific termination date.

The company had 1,250 stores in 50 states, Puerto Rico and Bermuda at quarter's end.