Sears Holdings Corp., the retailer run by hedge fund manager Edward Lampert, posted a 10.6 percent drop in same-store sales last quarter, its second consecutive period of double-digit declines.
The company’s sales fell 13.9 percent at Sears-branded stores and they decreased 6.9 percent at its Kmart chain, according to a statement on Monday. Sluggish demand for consumer electronics contributed to the decline, which follows an 11 percent drop in the first quarter. The Hoffman Estates, Illinois-based company said it’s now working to revamp that product category.
The results reflect Lampert’s challenges in turning around Sears, a storied department-store chain that has struggled to connect with today’s shoppers. To stem the flow of red ink, he has been shedding assets such as the Lands’ End clothing business. Lampert, Sears’s chief executive officer and largest shareholder, also generated $2.7 billion by selling 235 properties to a real estate investment trust that was spun off from the retailer.
“We intend to continue taking significant actions to alter our capital structure,” Sears said on Monday, including further reductions in debt or changes in the composition of its debt.
The numbers sent Sears shares down 10 percent to $19.39, the biggest one-day decline since June 10. The shares have fallen 35 percent this year.
Even as sales tumble, the company is making progress in restoring profitability. Sears’s adjusted loss before interest, taxes, depreciation and amortization was $189 million to $249 million in the second quarter, which ended July 25. That would be the fourth quarter of improvement on that basis. Sears plans to report final second-quarter results on Aug. 20.
The company also extended its $3.28 billion credit line, giving it more of a cushion. That financing, combined with proceeds from the REIT, have “substantially enhanced our financial flexibility,” Sears said.