HOFFMAN ESTATES, Ill.
Sears Holdings Corp. warned on Monday that it will post a bigger-than-expected loss for the first quarter due mainly to a drop in appliance, clothing and consumer electronic sales.
Appliances, which saw the largest drop, had benefited in the prior year from the 'Cash for Appliances' rebate programs in the quarter. Apparel experienced slow spring/summer sales due in part to bad weather, which hurt customer traffic. Sears said its home, sporting goods, jewelry and footwear categories continued to generate sales growth during the quarter.
The department store retailer forecast a loss for the quarter ended April 30 of $145 million to $195 million, or $1.35 a share to $1.81 a share. Analysts' consensus estimate calls for a loss of just a penny a share, according to FactSet. In the same quarter last year, Sears reported a profit of $16 million, or 14 cents a share.
The company said sales at its Kmart stores open at least a year fell 1.6 percent during the quarter, while sales at U.S. Sears stores declined 5.2 percent. Sears Canada projects its sales at established stores will be down 9.2 percent.
The retailer noted that online sales performed better, with the number of purchases made on its chains' websites and shipped directly to customers up 22 percent.
Meanwhile, Sears' board of directors authorized the company to buy back an additional $500 million shares. During the quarter, Sears bought back 1.2 million of its common shares for $101 million. As of last Saturday, the company had $86 million still available for more share buybacks, not counting the newly authorized plan.
Sears plans to report full financial results for its fiscal first quarter on May 19.
Shares in Sears slid $1.79, or 2 percent, to close earlier at $84.18.