Sears reports 0.1 percent growth in Q2 comparable store sales

REPORT_ Sears full-line stores experienced comparable store sales growth of

0.1 percent for the second quarter as compared to a decline of 0.8 percent in the second quarter of last year. Excluding the impact of consumer electronics, comparable store sales growth would have been 1.6 percent. Kmart comparable stores sales were down 1.7 percent for the quarter as compared to a 2.1 percent decline last year. Excluding the impact of both, comparable store sales were expected to decline 1 percent. Online and multi-channel sales grew 18 percent over the prior year second quarter and 22 percent over the prior year first half.

“We have continued to show progress in our transformation, as demonstrated by our year-over-year increase in online and multi-channel sales, and with our member sales now representing 73 percent of eligible sales,” said Edward S. Lampert, Sears Holdings' Chairman and Chief Executive Officer, adding, “However, our second quarter earnings are unacceptable and we are taking steps to address our performance on several levels. This includes reducing costs as we evolve our business model, investing in our Shop Your Way and integrated retail customer initiatives, rationalizing our physical footprint and improving pricing and promotions.”

Revenues decreased 858 million dollars to 8 billion dollars for the quarter ended August 2, 2014, as compared to revenues of 8.9 billion dollars for the quarter ended August 3, 2013. The revenue decrease included the separation of the Lands' End business, which was completed in the first quarter of 2014 and accounted for 330 million dollars of the decline. The revenue decrease also included the effect of having fewer Kmart and Sears full-line stores in operation, which accounted for 256 million dollars of the decline, as well as a decrease of 140 million dollars at Sears Canada.

Revenues for the quarter also declined as a result of lower domestic comparable store sales, which accounted for 47 million dollars of the decline. Finally, company also experienced a revenue decline in its Home Services business during the quarter, as well as a decline in delivery revenues which combined, accounted for the majority of the other revenue decline.

Sears Canada's revenue decline of 140 million dollars was driven by a 6.8 percent decline in comparable store sales, which accounted for 47 million dollars of the decline, as well as the effect of having fewer stores in operation, which accounted for 35 million dollars of the decline. Sears Canada also experienced declines in the Home Services business which accounted for 13 million dollars of the decline. Revenues also included a decrease of 35 million dollars due to foreign currency exchange rates.

For the quarter, domestic comparable store sales declined 0.8 percent, comprised of a decrease of 1.7 percent at Kmart and an increase of 0.1 percent at Sears Domestic. Excluding the impact of consumer electronics on both formats and grocery & household on the Kmart format, domestic comparable store sales would have increased 0.4 percent.