Sears posts decline in 3Q revenue due to store closures

FILE- In this Nov. 9, 2012, photo, a Sears store is shown in Hialeah, Fla. Sears Holdings Corp. is announcing that it will close 68 Kmart stores and 10 Sears stores as it struggles to restore profitability. (AP Photo/Alan Diaz, File)

(AP) — Sears says it has a deal with the federal pension insurance agency to release 140 properties from certain restrictions in exchange for $407 million in pension contributions, some relief for once-storied department store chain.

The Hoffman Estates, Illinois retailer, which operates Sears and Kmart stores, says it expects net losses for the third quarter to improve by $190 million and that it hit its $1.25 billion target in cost savings for 2017. The company continues to close underperforming stores and sell assets in an attempt to remain afloat.

Sears expects about $3.7 billion in revenue for the third quarter, down from $5 billion a year ago, mostly due to store closures. It lost more than $2 billion in 2016.

Related Content: Sears to close another 63 stores

The deal with the pension fund is expected to close in three months. After the $407 million contribution is made, Sears said it will be freed from pension obligations for two years, with the exception of a $20 million payment in the second quarter of 2018.

The company known for DieHard batteries and Kenmore appliances has been selling assets, most recently its Craftsman tool brand. Sears has said it’s been hamstrung by the pension obligations, which prevented the company from selling off even more assets to fund operations.

Sears said its revenues were also dinged by reductions in the number of pharmacies in its Kmart stores, as well as cuts to consumer electronics offerings in Kmart and Sears stores.

Related Content: Struggling department store chain Sears closing more stores

Total sales in existing stores — a key metric of a retailer’s health — declined more than 15 percent for the quarter, with Kmart comparable-store sales falling 13 percent from last year’s quarter. Sears comparable-store sales declined 17 percent for the same period in 2016.

In addition to previously announced store closings, Sears said earlier this month it would close 63 additional namesake and Kmart stores after the holidays.

Shares in Sears fell almost 5 percent in afternoon trading, to $4.76, an all-time low, and have declined about 60 percent in the past year.

WTNH NEWS8 provides commenting to allow for constructive discussion on the stories we cover. In order to comment here, you acknowledge you have read and agreed to our Terms of Service. Commenters who violate these terms, including use of vulgar language or racial slurs, will be banned. Please be respectful of the opinions of others. If you see an inappropriate comment, please flag it for our moderators to review. Also, you can now block any inappropriate user by simple selecting the drop down menu on the right of any comment and selection "Block User" from there.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s