Sears Q3 Results Still Aren’t Good Enough

By Chris Lange Updated Jan 12, 5:00PM EST · Published Dec 8, 8:35AM EST

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Sears Q3 Results Still Aren’t Good Enough — © Thinkstock

Sears Holdings Corp. (NASDAQ: SHLD) reported its fiscal third-quarter financial results before the markets opened on Thursday. The company posted a net loss of $3.11 per share and $5.03 billion in revenues. The consensus estimates from Thomson Reuters had called for a net loss of $4.06 per share on revenue of $4.95 billion. The same period of last year reportedly had a net loss of $2.98 per share and $5.75 billion in revenue.

Comparable sales overall declined by 7.4%, which accounted for $304 million of the revenue decline. At Kmart, comparable store sales decreased 4.4%, and Sears Domestic comparable store sales decreased 10.0% during this time.

During the third quarter, gross margin decreased $300 million compared to the prior year third quarter due to the above noted decline in sales. The decline in margin rate in both segments was primarily driven by performance in the apparel business, as well as an overall increase in markdowns.

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On the books, the company’s cash balances totaled $258 million at the end of the quarter, up from $238 million at the end of the previous fiscal year.

Edward S. Lampert, chairman and CEO, commented:

We remain fully committed to restoring profitability to our Company and are taking actions such as reducing unprofitable stores, reducing space in stores we continue to operate (including through the Seritage lease arrangement), reducing investments in underperforming categories and improving gross margin performance and managing expenses relative to sales in key categories. While many observers have acknowledged the significant asset base of our Company, we understand the concerns related to our operating performance and are committed to transforming our Company through our Shop Your Way membership program and our Integrated Retail investments. At the same time, we will continue to explore options to recognize the inherent asset value in a manner that complements our transformation.

Shares of Sears closed Wednesday up nearly 3% at $12.12, with a consensus analyst price target of $9.00 and a 52-week trading range of $10.50 to $22.93. Following the release of the earnings report, the stock was down about 1% at $12.00 in early trading indications Thursday.

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About the Author Chris Lange →

Chris Lange is a writer for 24/7 Wall St., based in Houston. He has covered financial markets over the past decade with an emphasis on healthcare, tech, and IPOs. During this time, he has published thousands of articles with insightful analysis across these complex fields. Currently, Lange's focus is on military and geopolitical topics.

Lange's work has been quoted or mentioned in Forbes, The New York Times, Business Insider, USA Today, MSN, Yahoo, The Verge, Vice, The Intelligencer, Quartz, Nasdaq, The Motley Fool, Fox Business, International Business Times, The Street, Seeking Alpha, Barron’s, Benzinga, and many other major publications.

A graduate of Southwestern University in Georgetown, Texas, Lange majored in business with a particular focus on investments. He has previous experience in the banking industry and startups.