It Cannot Get Any Worse at Sears -- Except at J.C. Penney

Retail

Published: August 22, 2013 6:30 am

For those who had hoped that Sears Holdings Corp. (NASDAQ: SHLD) would break out of its multiyear revenue and earnings funk, think again. After too many management changes to count, and fits and starts of redesigning its K-Mart and Sears stores, majority holder and CEO Eddie Lampert botched it again.

There is no reason to go beyond the retail holding company’s press release:

Second Quarter Revenues and Comparable Store Sales Revenues decreased $596 million to $8.9 billion for the quarter ended August 3, 2013, as compared to revenues of $9.5 billion for the quarter ended July 28, 2012.

And:

For the quarter, domestic comparable store sales declined 1.5%, comprised of decreases of 2.1% at Kmart and 0.8% at Sears Domestic. The decline at Kmart reflects decreases in our transactional categories, such as grocery & household, pharmacy and drugstore. It also includes declines in consumer electronics and toys. These decreases were partially offset by increases in the footwear and lawn & garden categories.

Of course, Sears Holdings lost money. Last year the net loss was $133 million. This year that improved to a loss of $127 million.

Lampert was crazy enough to paint the picture as OK:

“We made meaningful progress this quarter in our transformation to a member-centric company. Shop Your Way members represented over 65% of our sales and they redeemed rewards points at a significantly higher rate than last year. While the increase in Shop Your Way promotional activity and member redemptions resulted in a meaningful increase in our costs, it demonstrates that our members are deepening their engagement with our program which will allow us to further accelerate our transformation,” commented Eddie Lampert, Sears Holdings’ Chairman and Chief Executive Officer. “At the same time, we recognize how important it is to improve the profitability of our company and I am disappointed that we did not deliver a better result.”

So, stronger engagement, but weaker sales.

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