Sears Holdings posts Q1 results, sees drop in Kmart same-store sales

HOFFMAN ESTATES, Ill. — Sears Holdings widened its loss during first quarter 2014 as it continues to move toward a member-centric, integrated model and invest in its Shop Your Way awards program. While progress continues, poor performance in its consumer electronic business and grocery and household items hampered sales at Kmart stores.

“Our performance in the first quarter highlights the challenges we are facing, as well as the progress we are making in this transformation. We are moving away from a company that was heavily based on selling products solely through a store-based network to a member-centric business model focused on providing benefits to our members anytime and anyplace,” said Edward Lampert, Sears Holdings’ chairman and CEO. “We are seeing progress in our transformation to a member-centric, integrated retailer as we continue to invest heavily in driving our Shop Your Way program. Member sales for the first quarter represented their highest level ever, representing 74% of eligible sales.”

The company posted a net loss of $402 million compared with a loss of $279 million in the year-ago period.

Revenues decreased $573 million to $7.9 billion for the quarter ended May. 3. The revenue decrease included the effect of having fewer Kmart and Sears full-line stores in operation, which accounted for about $185 million of the decline.

At Kmart, same-store sales decreased 2.2% compared with a 4.6% last year. The decline at Kmart was largely driven by declines in the consumer electronics and grocery and household categories. Excluding the impact of both, same-store sales would have declined 0.4%.

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