The net loss expanded to $573 million, or $5.39 a share, from $194 million, or $1.83, a year earlier, as sales fell 9.7 percent, the Hoffman Estates, Illinois-based company said today in a statement. The shares declined the most since January.
Lampert, who is chief executive officer and the largest shareholder, called the results “unacceptable” in the statement.
Sears will reduce costs, close stores and improve pricing and promotions, among other steps, Lampert said. He has been selling and spinning off assets to raise cash as he works to bolster the retailer’s digital and rewards programs. Loyalty-program members generated 73 percent of eligible sales in the quarter.
“Second quarter was a little worse than we had expected,” Matt McGinley, managing director at International Strategy & Investment Group, said in an e-mail. “But, overall, no major surprises -- Sears results are consistently bad.” McGinley, based in New York, recommends selling the shares.
Sears fell 7.1 percent to $33.38 at the close in New York. The shares have dropped 16 percent this year while the Standard & Poor’s 500 Index has gained 7.8 percent.
Sears’s year-earlier results included Lands’ End, the clothing retailer Sears spun off in April.
Sales in the quarter ended Aug. 2 dropped to $8.01 billion from $8.87 billion. Revenue has fallen as the retailer closed stores and unloaded businesses, including the spinoff of the smaller-format Sears Hometown & Outlet Stores unit in 2012 and the sale of five leases in Canada for C$400 million ($366 million) last year. The spinoff of Lands’ End accounted for $330 million of the revenue decline, Sears said.
Annual revenue has shrunk by almost a third since Sears last had sales growth. The retailer last posted a quarterly gain, when compared to year-earlier figures, during the three months ended February 2007, when annual sales were $53 billion. The retailer generated $36.2 billion in revenue last fiscal year.
Sears also said today the company plans to seek more long-term capital-structure flexibility from lenders in the coming six to 12 months.
In May, the company said it is exploring options for its remaining stake in Sears Canada after years of losses. Sears reduced its share in the Toronto-based retailer to 51 percent from 95 percent in 2012.
Because of previous store sales, the Canadian unit has been “stripped” of its best assets, McGinley said in a telephone interview before the results were released. “It’s just really the carcass of a dying retailer.”
The company today said it has had talks with third parties about options for the Sears Auto Center business, including partnerships. Also on the block is the company’s warranty business.
All suffer from the same problem, McGinley said, a tarnished brand.
Sears “just doesn’t have the same resonance, it doesn’t have the same level of importance to people as it had 30 years ago,” McGinley said.
Sales at stores open at least a year fell 1.7 percent at Kmart and rose 0.1 percent at Sears, dragged down by declining electronics sales, for a companywide decrease of 0.8 percent. Online sales climbed 18 percent.
Sears last week named Alasdair James, a former Tesco Plc executive, to head the Kmart business, which has struggled to compete with the larger discount chains that entice shoppers with groceries and lower prices.
To contact the reporter on this story: Lauren Coleman-Lochner in New York at email@example.com