Sears second-quarter earnings will likely fall well below Wall Street expectations due to disappointing sales of home appliances and other products at both Sears and Kmart, the department store chain said Tuesday.
For the quarter ending Aug. 4, executives at the nation’s third-largest retailer said Sears Holdings Corp. expects to post earnings between $160 million and $200 million, or between $1.06 and $1.32 per share. That includes an 8-cent per share gain from bankruptcy-related settlements and investing activities.
Analysts polled by Thomson Financial had expected second-quarter earnings of $2.12 per share for the Hoffman Estates-based company.
“We are disappointed with our recent performance,” Chief Executive Aylwin Lewis said in a statement. “Although we believe our business has suffered from many of the same factors that have led other retailers to announce disappointing results and lowered expectations, our recent performance underscores our ongoing need to become more relevant to consumers while improving our discipline around expense management.”
During a nine-week period that ended July 7, same-store sales at Kmart’s U.S. locations fell 3.9 percent while same-store sales fell 4 percent at Sears.
There were slight increases in women’s apparel and footwear sales at Sears stores, but that wasn’t enough to offset declines felt across most other categories.
Same-store sales figures are an important a retail industry metric of stores open at least one year.
Separately, Sears said it approved the purchase of up to $1 billion of its common shares, in addition to the $121 million worth of shares that remain available for repurchase under the company ’s current buyback program. Since late 2005, Sears has repurchased nearly 14 million shares at a total cost of $1.9 billion.