Sears' losses narrow, but sales decline

HOFFMAN ESTATES, Ill. - Sears' (SHLD) third-quarter loss narrowed as the retailer reduced expenses and remained focused on its reward program customers. Its sales continued to soften though.

For the period ended Oct. 31, the owner of Sears and Kmart stores lost $454 million, or $4.26 per share. That compares with a loss of $548 million, or $5.15 per share, a year ago.

Stripping out certain items, Sears Holdings Corp. lost $2.86 per share.

Revenue totaled $5.75 billion, down from $7.21 billion a year earlier. The chain said that the drop in revenue was due to the sale of most of its Sears Canada stake and because it has fewer Sears and Kmart stores.

Sales at stores open at least a year, a key indicator of a retailer's health, declined 8.6 percent. This metric excludes results from stores recently opened or closed.

Sales at Kmart locations open at least a year fell 7.5 percent. The figure dropped 9.6 percent at Sears locations. The Hoffman Estates, Illinois-based company said Thursday that more than half of the decline came from weaker sales of clothing and consumer electronics.

Chairman and CEO Edward Lampert, a billionaire hedge fund investor, combined Sears and Kmart in 2005, about two years after he helped bring the latter out of bankruptcy. Facing increased pressure from Wal-Mart, Target and others, Sears created the Shop Your Way loyalty program, which rewards members for items they purchase.

Sales to people enrolled in Shop Your Way loyalty program made up 75 percent of eligible sales for the quarter.

Lampert said in a statement that promotional and marketing changes have helped to boost profit, but pressured its same-store sales results.

Sears said that at quarter's end it had about $1.3 billion of immediately available liquid assets.