Sears Holdings Q2 revenues $4.4 billion, will close 28 Kmart stores
Staff Writer |
Sears Holdings Corporation announced financial results for its second quarter ended July 29, 2017.
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During the second quarter 2017, Sears had total revenues of approximately $4.4 billion, compared with $5.7 billion in the prior year quarter, with store closures contributing to approximately $770 million of the decline, and with reductions in the number of pharmacies in open stores and the reduction in consumer electronics assortment continuing to contribute to our overall sales decline.
"Comparable store sales declined 11.5% during the second quarter of 2017. Kmart comparable store sales decreased 9.4%, with a 6.8% decline excluding the impact of the consumer electronics and pharmacy categories, while Sears comparable store sales declined 13.2%, with a 12.1% decline excluding consumer electronics category," the company said.
"We continued to focus on streamlining our operations, reducing inventory and operating expenses, and are taking incremental actions to further improve the Company's performance.
"The impact of the various actions we have taken resulted in improved Adjusted EBITDA in each consecutive month of the quarter, including positive Adjusted EBITDA in the month of July.
"We reported a net loss attributable to Sears Holdings' shareholders of $251 million in the second quarter of 2017, compared to a net loss attributable to Sears Holdings' shareholders of $395 million in the prior year second quarter.
"In addition, Adjusted EBITDA was $(67) million for the second quarter of 2017, compared to $(191) million in the prior year second quarter.
"As a result of the Seritage and JV transactions, Adjusted EBITDA for the second quarter of 2017 and 2016 included additional rent expense of approximately $44 million and $48 million, respectively.
"Due to the structure of the leases, we expect that our cash rent obligations to Seritage and the joint venture partners will decline, over time, as space in these stores is recaptured.
"From the inception of the Seritage transaction to date, we have received recapture notices on 36 properties and also exercised our right to terminate the lease on 56 properties, which is estimated to reduce our rent payments by approximately $52 million on an annual basis.
"In fiscal year 2017, we have closed approximately 180 stores previously announced for closure, and an additional 150 stores previously announced for closure are expected to be closed by the end of the third quarter of 2017.
"In addition, later this morning we will be notifying associates at 28 Kmart stores that we will be closing these stores later this year." ■