Sears Holdings Corporation announced financial results for its first quarter ended April 30, 2016.
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Revenues decreased approximately $488 million to $5.4 billion for the quarter ended April 30, 2016, compared to revenues of $5.9 billion for the quarter ended May 2, 2015.
The decrease in revenue was primarily driven by a 6.1% decline in comparable store sales during the quarter, which accounted for $268 million of the revenue decline, and by having fewer Kmart and Sears Full-line stores in operation, which accounted for $149 million of the decline.
At Kmart, comparable store sales decreased 5.0% driven by declines in the consumer electronics, grocery & household, pharmacy, drugstore and home categories. Sears Domestic comparable store sales decreased 7.1% primarily driven by decreases in home appliances, apparel, consumer electronics, footwear and Sears Auto Centers.
During the quarter, gross margin decreased $341 million due to the above noted decline in sales, as well as a decline in our gross margin rate. Kmart's gross margin rate for the first quarter declined 310 basis points compared to the prior year first quarter, while Sears Domestic's gross margin rate declined 470 basis points.
Selling and administrative expenses decreased $178 million in the first quarter of 2016 compared to the prior year quarter. Excluding significant items noted in our Adjusted Earnings Per Share tables, selling and administrative expenses declined $176 million primarily due to a decrease in payroll expense.
Effective tax rate for the first quarter of 2016 was an expense of 3.3%, compared to an expense of 6.3% in the prior year quarter.
Sears Holdings reported a net loss attributable to Holdings' shareholders of $471 million for the first quarter of 2016 compared to a net loss attributable to Holdings' shareholders of $303 million for the prior year period.
Net loss attributable to Holdings' shareholders for the first quarter of 2016 and 2015 included significant items noted in our Adjusted Earnings Per Share tables, which aggregated to expense of $272 million and $90 million, respectively.
Adjusting for these significant items, we would have reported a net loss attributable to Holdings' shareholders of $199 million and $213 million in the first quarter of 2016 and 2015, respectively.
Sears Holdings' cash balances were $286 million at April 30, 2016 compared with $238 million at January 30, 2016.
Merchandise inventories at April 30, 2016 were $5.0 billion, compared to $5.1 billion at May 2, 2015, while merchandise payables were $1.3 billion and $1.7 billion at April 30, 2016 and May 2, 2015, respectively.
Short-term borrowings totaled $380 million at the end of the first quarter of 2016 compared to $797 million at January 30, 2016. ■