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Sears Canada prevented bigger fall with cost cutting

Staff writer |
Sears Canada announced its unaudited Q1 results. Total revenue for the period ended May 4, 2013 was $867.1 million, compared to $928 million last year. That's a decrease of 6.6%.

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Same store sales decreased 2.6%. The net loss for the quarter this year was $31.2 million or $0.31 cents per share compared to net earnings of $93.1 million or $0.91 cents per share for the same period last year. Included in the net earnings for Q1 last year was a pre-tax gain of $164.3 million related to the lease terminations of three stores as announced by the Company on March 2, 2012.

Excluding the gain from lease terminations, the net loss in the first quarter last year was $44.9 million. Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) for the 13-week period ended May 4, 2013 was a loss of $9.8 million compared to a loss of $22.7 million for the 13-week period ended April 28, 2012, an improvement of $12.9 million.

"We are encouraged to see significant improvements in areas that we have targeted with our Transformation, particularly in the soft lines businesses. We experienced year over year growth in Apparel and Accessories for the second quarter in a row, the first time this has happened in over six years," said Calvin McDonald, president and chief executive officer of Sears Canada Inc.

"At the same time our rate management initiatives have positively impacted gross margin by 50 basis points, while our focus on controlling costs has reduced expenses by 7.9% compared to the same period last year. Factoring out the gains from the return of the three leases to the landlord last year, we are seeing an overall improvement in our bottom line for the quarter as compared to the first quarter last year," added Mr. McDonald.

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