Sears Holdings Corporation announced financial results for its first quarter ended May 2, 2015. Domestic adjusted EBITDA was $(141) million in the first quarter of 2015 compared to $(178) million in the prior year first quarter.
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This is the third consecutive quarter of improved EBITDA performance on a year-over-year basis.
Net loss attributable to Sears Holdings' shareholders was $303 million ($2.85 loss per diluted share) for the first quarter of 2015 compared to a loss of $402 million ($3.79 loss per diluted share) for the prior year first quarter;
Sales to Shop Your Way members in Sears Full-line and Kmart stores were 74% of eligible sales for the first quarter.
Kmart and Sears Domestic comparable store sales declined 7% and 14.5%, respectively, in the first quarter of 2015 driven by more efficient and targeted promotional and marketing spend, and a focus on sizing certain categories, such as consumer electronics, to better fit member needs, that together generated higher margins and increased profitability year-over-year; revenues were also impacted by port issues on the West Coast.
Kmart's gross margin rate for the first quarter improved 150 basis points over the prior year first quarter, while Sears Domestic's gross margin rate improved 350 basis points.
The company continues to demonstrate that it has the financial flexibility to fund its transformation and meet its obligations.
As of May 2, 2015, the company had approximately $726 million in availability under our credit facility and $286 million in cash prior to the impact of the announced REIT transaction which, assuming it successfully closed as of the end of the first quarter, would have resulted in pro forma cash on hand of $2.3 billion and availability under our credit facility of $1.1 billion.
The company continue to make progress towards the formation of Seritage Growth Properties, a public real estate investment trust or REIT, and its subsequent purchase of properties from the company. The company expects that it will be declared effective by the SEC this week, and are targeting to launch the rights offering on Friday, June 12, 2015.
The transaction will involve the sale and leaseback of approximately 235 Sears and Kmart stores, as well as the purchase of our interest in the joint ventures, with expected proceeds to Sears Holdings of $2.6 billion. This, when combined with the proceeds from the previously announced joint venture transactions, will result in proceeds in excess of $3.0 billion. ■